BREAKINGVIEWS-Soaring drone IPO is likely to fly off-course

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Robert Cyran

NEW YORK, March 19 (Reuters Breakingviews) - Shares of Swarmer, backed by defense kingpin Erik Prince, popped 520% on their first trading day. War in Iran and experience in Ukraine feed hopes of success. A valuation at 2,000 times revenue and the track record of small, volatile, politically-connected debuts argue otherwise.

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CONTEXT NEWS

Swarmer, which develops software to control groups of autonomous drones, raised $15 million in its initial public offering on March 17, selling 3 million shares at $5 each. The company’s stock closed at $31, or a 520% increase, before rising again sharply on March 18, resulting in Swarmer having a market capitalization exceeding $700 million, assuming the underwriter, Lucid Capital Markets, exercises its overallotment option.


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