The Slings & Arrows of IPOs

5:55 PM -- It's been a topsy-turvy day for recently public companies Mellanox, Riverbed, and Isilon. (See Mellanox Exceeds IPO Hopes, Isilon Bleeds, Vows Profits, and Riverbed Flows Toward Profitability.)

Mellanox, the first storage-related IPO of 2007, started trading this morning at $17 dollars, ending at $20. (See Mellanox Goes Public.) Riverbed and Isilon, which both went public last year, saw their stock plummet during trading today.

Riverbed, which announced a secondary public offering with its quarterly results last night, saw its stock fall $4.25 (12.06 percent), closing at $30.98. (See Riverbed Plans Second Offering and Riverbed Reports FY06.)

Isilion, which also published its results last night, fared even worse, with its stock falling $4.48 (17.7 percent) to close at $20.83. (See Isilon Reports Earnings.) Goldman Sachs analyst Laura Congiliaro warned in a guidance note that Isilon must now start landing larger deals, although she predicts that the firm should get a boost from its growing software business.

Is the honeymoon also over for Riverbed? Robert W. Baird downgraded the vendor today, citing stronger competition in the WAFs and WAN optimization space. Analyst Cameron Cooke of Janco Partners echoed this sentiment in another guidance note. "Competition is definitely on the horizon," he said, naming Cisco as the chief challenger. "Juniper, F5 and others are circling the market."That said, Riverbed reported its first quarter of profitability last night, and Cooke estimates that the firm still has a one-to-two year technology lead on its rivals.

If Riverbed wants to get the market back on its side, then it should think about fleshing out the skeleton on its product roadmap that was discussed during its earnings call last night.

Getting to IPO is one thing, but long-term growth is something else altogether.

James Rogers, Senior Editor Byte and Switch