The first big tech IPO of 2017 is already showing a worrisome sign

San Francisco startup AppDynamics snuck its long-delayed S-1 in right before the end of 2016, and in an updated filing on Thursday, the company announced that it will price its IPO between $10 and $12 a share. 

The problem is that, even at $12 a share, the IPO will value AppDynamics at around $1.5 billion — which is less than the startup's last private valuation of $1.9 billion. That's not a great outcome for the company's existing backers, who invested in AppDynamics as a private company.

And it's also a bad sign for other richly valued private companies waiting to go public. It' s very likely that investors will take AppDynamics' IPO performance as a referendum on the viability of so-called "unicorn" startups — startups with private valuations of $1 billion or more — on the public markets. This year, "unicorns" like Spotify, Dropbox, and Snapchat parent company Snap are rumored to be undergoing their own long-awaited IPOs, and so Wall Street will be watching AppDynamics closely. 

Assuming the company debuts at the high end of its price range, AppDynamics, which sells application performance monitoring software to businesses, will raise around $167.7 million in its initial offering. 

Of course, it's possible that shares of AppDynamics will pop on the first day of trading, particularly given the price where the shares are starting.

AppDynamics will trade under the symbol "APPD" on the Nasdaq exchange. For the nine months ending October 31st, 2016, AppDynamics posted a net loss of $95.1 million on revenue of $158.4 million, a 54% gain in revenue from the same period in the year-ago period.

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