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Okta Headed For Another Stock Boost From Quiet Period Expiration

Event Overview

The quiet period will expire for Okta (Nasdaq:OKTA), on May 2, 2015.

On that date, restrictions preventing underwriters from recommending or reporting on the deal will be lifted. Underwriters tend to release reports as soon as restrictions are lifted and these reports most often are positive. Our firm has studied price movement around IPO quiet period expirations and have found an uptick in the stock price in a short window of time surrounding these days. This is particularly true for companies with a large team of underwriters and which have performed well since the IPO.

Okta Inc. fits both of these criteria. We predict an increase in share price in the five days prior to and two days after the conclusion of the quiet period, which is in line with what we have seen in our research.

Underwriters for the deal include: Allen & Co., Goldman Sachs, J.P. Morgan, Cannacord Genuity, JMP Securities, and Pacific Crest Securities.

We first previewed Okta ahead of its IPO and recommended investing. High revenue growth, increasing gross margins, and leading position in a growing market were all factors that motivated us to invest. We view the upcoming quiet period expiration as a second buying opportunity...