JAMF shares soar in debut, as IPO gives investors another way to bet on Apple

Key Points
  • Shares of JAMF jumped as much as 92% on Wednesday after the Apple partner priced 18 million shares at $26 each. They closed up 51%.
  • JAMF was founded in 2002, and the company gets most of its revenue by helping businesses deploy Apple products.
  • Revenue climbed 37% in the first quarter to $60.4 million.
JAMF CEO Dean Hager on the company's IPO and the impact of covid on the business
JAMF CEO Dean Hager on the company's IPO and the impact of covid on the business

JAMF shares soared 51% in their debut on Wednesday after the company, which helps businesses deploy Apple products, priced its IPO above its expected range.

On Tuesday, JAMF priced 18 million shares at $26 each, after previously increasing the range to $21 to $23. The stock climbed as high as $51 on the Nasdaq, before closing at $39.20. That gives the company a market cap of about $4.6 billion. It was trading around $41 at midday.

It's the latest tech IPO to soar, showing that investors continue to thirst for growth amid the coronavirus pandemic and that companies are still leaving hefty amounts of cash on the table as they go public. Tech IPOs have long been criticized for a process that lets bankers give underpriced stock to new investors, who often enjoy an immediate pop while the issuing company raises far less money than it could. Insurance tech company Lemonade jumped 139% in its first day of trading earlier this month, a week after Chinese cloud software provider Agora rose 150%.

Founded in 2002, JAMF's says its mission is to "help organizations succeed with Apple," the most valuable U.S. company with a market cap approaching $1.7 trillion.

JAMF helps companies securely deploy Mac computers, iPhones and iPads, connecting them together and giving IT teams the tools to manage them. In its prospectus, JAMF says it has 40,000 customers deploying more than 17 million Apple devices.

First-quarter revenue climbed 37% from a year ago, to $60.4 million, and JAMF's gross margin rose to 75% from 70%, as more customers turned to its subscription offering. Its net loss narrowed slightly from $9 million to $8.3 million.

JAMF said that, with more people working remotely during the Covid-19 outbreak, the company is doing fewer in-person trainings and moving more sessions online, which is pulling down services revenue. However, more employers are transitioning to the subscription service, according to the prospectus. 

"We believe our internal cloud-first technology platforms have allowed for a seamless transition to a remote working environment without any material impacts to our business, highlighting the resilience of our business model," the company said. Still, JAMF repeatedly cites uncertainty surrounding the length and magnitude of the broader crisis as a significant risk.

Another risk comes from Apple. Last month, the iPhone maker announced the acquisition of Fleetsmith, a 4-year-old company, whose software makes it easier to remotely configure, wipe and deploy devices. JAMF said it currently sees Fleetsmith as focused on small and medium-sized businesses, but it could use the technology "to compete more directly with the scale and breadth of product offerings we provide," the filing warns. 

JAMF is principally controlled by private equity firm Vista Equity Partners, which acquired a majority of the company in 2017 for $733.8 million. The firm's stake is now worth more than $3.6 billion, based on JAMF's closing price on Wednesday.

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