Trustwave Holdings Inc. needs to raise money and apparently believes the nation’s economic environment has improved just enough for an initial public offering to achieve that goal, one analyst contends.
Trustwave announced April 21 that it had filed a registration statement with the U.S. Securities and Exchange Commission for the IPO. The number of shares and the price range for the offering have not yet been determined, Trustwave noted in press release.
A Trustwave spokesperson declined to comment, saying the company is now in a “quite period.”
However, George Peabody, director of Mercator Advisory Group's Emerging Technologies Advisory Service, says Trustwave has been losing money the past few years. “They need a war chest, no doubt,” he says.
Recent improvement in the IPO market could help the Chicago-based security compliance company’s offering succeed, Peabody says. “It’s been a rotten IPO environment the last couple of years,” he notes. “But a bunch of folks seem to think now is the time. Maybe it’s now or never; they seem to think the economy is just good enough to warrant it.”
Fears that interest rates could rise also could make this the right time for a Trustwave IPO, Peabody says. “There’s some expectation that interest rates are going to go up,” he says. “So before the cost of money goes up, they’re going to get the equity side locked in.”
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