Real Time Communications Industry News

TMCNet:  Silver Spring Networks skyrockets 29 percent in first day of trading

[March 13, 2013]

Silver Spring Networks skyrockets 29 percent in first day of trading

Mar 13, 2013 (San Jose Mercury News - McClatchy-Tribune Information Services via COMTEX) -- REDWOOD CITY -- Silver Spring Networks, one of the leading companies in the highly competitive "smart grid" space, celebrated its long-awaited IPO on Wednesday, with shares skyrocketing 29 percent in the first day of trading.


The company, largely backed by Foundation Capital, made 4.75 million shares available -- 1 million more than originally planned -- due to high demand from investors. It priced the IPO at $17 a share, the midpoint of its stated $16-$18 range, giving it a total take of $81 million and an estimated initial valuation of about $754 million. All the shares came from the company, as early investors kept their stakes.

"This was a really wonderful milestone," CEO Scott Lang said in a telephone interview from New York, after ringing the opening bell of the New York Stock Exchange. "Our investors see the size of this market." Lang said there was a lot of "high quality" demand from investors, and the decision was made to make an additional 1 million shares available to satisfy "some of" that demand.

Silver Spring Networks, trading under the ticker symbol SSNI, closed at $21.89, up 28.76 percent.

"Silver Spring has been one of the most highly anticipated U.S. cleantech IPOs ever," said Dallas Kachan, managing partner of cleantech research firm Kachan & Co. "Its first-day performance is nice to see, but save the applause. By pricing at the middle of its range, upward movement was likely." Kachan said that what really matters is the stock's long-term performance. SolarCity, which celebrated its IPO in December, saw its stock slide on lower-than-expected earnings.

Silver Spring, based in Redwood City-based, first filed for an IPO in July 2011, and as the months passed many questioned whether it would be able to pull it off. The company had originally hoped to raise $150 million; in its Feb. 26 prospectus, it said it would offer just 3.7 million shares and raise $63 million.

Silver Spring Networks was founded in Milwaukee in 2002 and provides the hardware, software and services that allow the smart grid to function. It has inked deals with several leading utilities, including PG&E and Baltimore Gas & Electric. The smart grid market is booming internationally in Brazil, Germany, China, South Korea and elsewhere.

The Department of Energy and the nation's leading utilities are eager to make the electric grid more reliable, secure and efficient, from the power plant and transmission lines to homes and offices. Silicon Valley's telecommunications and software expertise have been key to these efforts.

Other smart grid startups in the valley have been acquired, including San Mateo-based eMeter, which was purchased by Siemens in 2011. However, the deployment of smart meters in the United States has slowed as federal stimulus dollars have dried up.

A small but vocal group of consumers in Northern California, Maine and elsewhere have voiced concerns about privacy and perceived health effects of smart meters, and in some jurisdictions have demanded the right to "opt-out" of having smart meter devices installed at their homes.

In its early days, Silver Spring Networks tried to raise money from investors in the Midwest with no luck. That changed when its executives had a meeting with Foundation Capitol in Menlo Park, which was keen to invest in companies that were improving energy efficiency from the demand side.

Foundation doubled down on its bet, purchasing $12 million of Silver Spring Networks stock at the IPO price in what the company called a "concurrent private placement" in its filing with the Securities and Exchange Commission. Foundation and its affiliated entities own more than a quarter of the company after the IPO, the filing said, at 27.7 percent.

Silver Spring Networks moved to Silicon Valley, and Foundation's Raj Vaswani became the company's chief technology officer. The company is also backed by Kleiner Perkins Caufield & Byers, Northgate Capital Partners and Google (GOOG) Ventures.

Staff writer Jeremy C. Owens contributed to this report. Contact Dana Hull at 408-920-2706. Follow her at Twitter.com/danahull.

$17 IPO share price $21.89 Share price at the close of trading Wednesday 28.8 percent Percentage gain on first trading day 4.75 million Number of shares made available $754 million Company's initial valuation ___ (c)2013 the San Jose Mercury News (San Jose, Calif.) Visit the San Jose Mercury News (San Jose, Calif.) at www.mercurynews.com Distributed by MCT Information Services

[ Back To Real Time Communications's Homepage ]

Featured Videos

GenView Real Time Session Manager Demo

Session-based VoIP and rich media services such as video can place unique demands on the network.

GENBAND SPiDR - WebRTC Gateway

Contact GENBAND about the SPiDRâ„¢ WebRTC Gateway by clicking here.

A videoconference that calls you

On the busiest of days, who has time to stop and search for that bridge information, to have to dial or hope the link works...only to wait for the chairperson to arrive?

Call Grabber Demo

Move calls seamlessly between phones, soft clients and mobile devices at the push of a button.

Hosted Unified Communications

GENBAND's Hosted Unified Communications is a SMART OFFICE™ solution that enables voice over broadband to Business users, providing flexible migration from legacy services, supporting full regulatory features, and offering advanced services.

Featured Whitepapers

Is Your Network Ready for the Internet of Everything?

The telephone industry is undergoing a dramatic transformation that began with the introduction of IP-based data networks in the early 1990s and then with Voice over Internet Protocol (VoIP) in the late 1990s, and it now includes all forms ofvoice, video, and messaging communications.

Building a Secure and Scalable Multimedia IP Exchange

As fixed and mobile operators increasingly move to IP-based networks, the complexity required to interconnect these networks grows dramatically. Faced with increasing competition from all corners and constant challenge to grow revenues, operators are struggling with the variety and disparities in partner and customer networks.

How Carriers Can Optimize for LTE Roaming

Connectivity between mobile network operators (MNO) in 4G LTE is much more complex than it was in legacy networks.This complexity is primarily due to the change in focus. LTE is not a voice-focused roaming environment, but rather a datacentric environment.

Featured Case Studies

CASE STUDY: Real Time Communications Made Easy Via The Mobile Web

HubRTC offers the world's first WebRTC communication as a service to small and medium businesses, combining browser-based voice, video and messaging over WiFi that works on personal computers and Android smartphones and tablets. Their basic and premium solutions work with existing PBX applications servers, and support rich feature sets including voice mail and visual voice mail, audio and video conferencing, all for a fraction of the cost of old fashioned "phone systems." They have combined their Real Time Communications experts with software, devices and accessories, and cloud platforms to deliver a true office-on-the-run.

CASE STUDY: TW Telecom Accelerates Market Adoption of SIP Trunking Services

tw telecom is one of the top three largest providers of Business Ethernet in the US, connecting approximately 20,000 commercial buildings and third-party data centers to its national fiber network.

CASE STUDY: Embedding Real-Time Communications Into Digital Interactive Publishing Platforms

X-Factor Communications (XFC) is a premium provider of easy-to-use, interactive digital media software and services delivering single point publishing of Mass Notifications, advisories, emergency messages, rich informational content and advertising to any connected device.

Featured Webinars

WebRTC Applications for Service Providers using GENBAND'S SPiDR Gateway


GENBAND's SPiDR WebRTC Gateway provides an intelligent bridge between SIP/IMS based VoIP networks and the open ecosystem of the Internet. WebRTC holds great promise to revolutionize the nature of our daily communications. But what should you, as a service provider, be doing today to take advantage of this movement?

Best Practices in Deploying Hosted IP Telephony


Speaker: Sara Hughes and Mitch Layman

LTE, How Can You Accelerate The Payback? Diameter Signaling Controller


Speaker: Ashish Jain - Director Solutions Marketing