(Updates share price in second paragraph.)
Sept. 27 (Bloomberg) -- Violin Memory Inc., a maker of high-speed data storage systems that’s partly owned by Toshiba Corp., plunged on its first day of trading.
The stock fell to $7.02, 22 percent below the offer price, in New York today. Violin Memory raised $162 million by selling shares for $9 each, after offering them for $8 to $10 apiece, according to a statement yesterday and data compiled by Bloomberg.
Violin Memory, which has booked losses every year since at least 2010, faces increasing competition after Hewlett-Packard Co., a former customer, started selling its own storage product. EMC Corp., International Business Machines Corp. and Dell Inc. bolstered their own storage offerings through acquisitions.
Hewlett-Packard ended its deal to resell Santa Clara, California-based Violin Memory’s storage, telling Bloomberg in October it favored its own 3PAR devices. The world’s second- biggest personal-computer maker represented only 10 percent of Violin’s revenue in the first six months of this year, down from as much as 65 percent last year.
In 2013, Violin Memory’s largest customers included Computer Security Solutions Inc. and Avnet Inc., which both resell the products to other clients.
The company had a net loss of $59.2 million in the six months through July 31, on revenue of $51.3 million, filings show.
“We are a company that is in the investment phase,” Don Basile, the chief executive officer of Violin Memory, said by phone today from the New York Stock Exchange. “For some investors, we’re a little early in our growth cycle.”
At the IPO price, Violin Memory was valued at $736.4 million. When the company confidentially filed for an IPO last October, the valuation being discussed approached $2 billion, people with knowledge of the matter said at the time.
Basile has led Violin Memory for the past four years, shifting its focus to flash storage, which is faster and more efficient than hard drives. Globally, the storage market exceeded $23 billion in sales this year and is projected to increase 65 percent to $38 billion by 2017, according to an August report by International Data Corp.
Shares of Fusion-io Inc., a competing storage company where Basile formerly served as chief executive officer, have slumped 42 percent this year as competition increased.
JPMorgan Chase & Co., Deutsche Bank AG and Bank of America Corp. managed Violin Memory’s offering. The stock is listed on the New York Stock Exchange under the symbol VMEM.
--With assistance from Ari Levy in San Francisco. Editors: Mohammed Hadi, Cecile Daurat