Rubrik’s stock plunged more than 6% on Tuesday as investors prepared for the expiration of its IPO lockup period, which is set to end on Wednesday. The lockup expiry often leads to insider and pre-IPO investor shares becoming eligible for sale, potentially putting downward pressure on the stock price.
The decline comes despite Rubrik’s positive second-quarter results, which showed robust revenue growth. The cybersecurity firm, backed by Microsoft, reported Q2 revenue of approximately $205 million, exceeding analysts’ expectations of $196.2 million. However, the company also posted an adjusted loss per share of 40 cents, better than the projected loss of 49 cents per share.
Rubrik’s results, the company’s second since going public in April, reflect increased spending by businesses on cybersecurity amid rising global threats. Key clients affected by cyberattacks include UnitedHealth Group, Microsoft, and Halliburton.
Brokerage CIBC acknowledged the potential for share price pressure due to the lockup expiry but maintained a positive outlook on Rubrik’s prospects, given the current strong cybersecurity spending environment.
With a market valuation of $5.77 billion as of Monday’s close, Rubrik is facing the possibility of losses exceeding $350 million if the current trend continues. Despite this, Chief Executive Bipul Sinha highlighted the company’s role in helping customers recover from global IT disruptions.
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