Shares of cloud-based cybersecurity Cloudflare (NET) - Get Report rose in their trading debut on Friday with the stock gaining nearly 23% to $18.44 from its initial public offering price of $15 despite concerns about the company's more recent disclosure of potential U.S. economic and trade sanctions violations.
The San Francisco-based company, which began trading on the New York Stock Exchange, first pitched its initial public offering between $10 and $12 a share, which it later increased to $12 to $14.
Cloudflare previously raised $332.1 million as a private company, with its most recent round totaling $150 million in March 2019. The company last had a private valuation of $3.25 billion.
Clouding its IPO, however, was an amended prospectus filed earlier this week with the Securities and Exchange Commission in which the company voluntarily disclosed that its products were used by, or for the benefit of, certain individuals and entities that have been blacklisted by the U.S.
A number of the parties made payments to the company in connection with their use of the platform - potentially violating Treasury Department economic and trade sanctions, the amended prospectus said, noting the impact on the company "could be substantial."