Gigamon IPO Debuts with Strength, Muted Pricing

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Gigamon Inc. (NYSE: GIMO) is the latest initial public offering (IPO) to hit the market. The recent selling may have muted some demand as the IPO priced within the expected range. Gigamon provides network traffic visibility solutions. Investors should know that of the sale, some two-thirds of the deal is coming from the company itself and one-third is coming from insiders and backers of the company.

Wednesday’s IPO is for 6,750,000 shares of common stock with a price of $19.00 per share. We had been given a price range of $18 to $20 per share, so this was right in the middle. Gigamon is offering 4,500,000 shares and certain selling stockholders are offering 2,250,000 shares.

As usual, Gigamon will not receive any of the proceeds from the sale of the shares being sold by the selling stockholders.

Goldman Sachs, BofA/Merrill Lynch and Credit Suisse were the lead joint book-running managers. Also in the syndicate we have Barclays as a joint book-running manager and Raymond James as co-manager. In addition, Gigamon has granted the underwriters a 30-day option to purchase up to 1,012,500 additional shares of common stock. The overallotment shares are listed as being from Gigamon itself rather than the selling shareholders.

Right after the opening shares were up at $24.50, on more than 500,000 traded in the first few minutes of the session.

UPDATE: At 11:35 AM EST we have Gigamon shares up 38.5% at $26.30 on more than 10.5 million shares trading on the debut session alone.