A Maynard company is about to learn if investors are ready to embrace new technology stocks again.
Acacia Communications Inc., which makes networking equipment, sold $103.5 million of stock in its initial public offering Thursday night, the first Massachusetts tech company to go public in nearly a year. The stock is set to begin trading Friday.
The outlook for IPOs has been dim since last summer, and the market for new technology stocks particularly slow, as investors balk at the high private-market valuations granted to so many fast-growing but unprofitable tech companies.
“I think investors are simply just paying less for growth,’’ said Matt Kennedy, an analyst at IPO-focused fund manager Renaissance Capital. “That growth-at-all-costs attitude costs too much. Investors are putting a greater emphasis on profitable, sustainable businesses.’’
Acacia sold 4.5 million shares at $23 a piece, according to a company statement on Thursday, the top end of the range it was seeking.
The only other technology company to debut on Wall Street in 2016 is SecureWorks Corp., a cybersecurity company spun out in April by Dell Inc. And even after SecureWorks reduced the size and price of its initial offering, its shares have since been trading below its debut price.
Public tech stocks have lagged the broader stock market. The Nasdaq 100 Technology Sector Index is down more than 8 percent over the past year, compared to less than 2.5 percent for the S&P 500 index of large public companies.
Acacia, though, has something many other young tech companies are still aspiring to: profits. For 2015, Acacia said profits tripled to more than $40 million on sales of around $240 million.
The last Massachusetts tech company to go public was Rapid7 Inc., a digital security software vendor, in July 2015. Rapid7 shares have not traded above their $16 IPO price since December. By comparison, in 2014 four local tech companies went public: Care.com, Hubspot, Wayfair, and Imprivata.
Wall Street remains a little more interested in drug and health care companies, even though biotech stocks have also performed worse than the broader stock market in 2016. So far this year, five biopharma companies from Massachusetts have gone public, including two on the same day in early May.
Acacia’s products sit at the connection point between datacenters and the fiber optic networks that deliver data across the Internet. They help translate digital signals into the light pulses that travel over fiber optic lines, and reverse the process on the other end of the connection.
The company says its equipment can do that work faster than other devices, allowing telecommunications companies, cloud computing services, and Internet content providers to zip more information around the Internet without having to replace the actual fiber connections.
However, the company has a looming problem with one of its customers that may weigh on the stock when it begins trading on the Nasdaq exchange Friday under the symbol ACIA.
Acacia has faced the loss of its largest customer, a telecom company in China, that was blacklisted earlier this year by the US government for allegedly trying to ship US-made goods to Iran. The Commerce Department said that it would require US suppliers to apply for an export license before shipping goods to ZTE, but said those licenses would generally be denied.
US officials granted the company, ZTE Kangxun Telecom Co. Ltd., a temporary reprieve from the trade sanctions in late March. But that reprieve expires at the end of June and there is no guarantee it will be extended, which could seriously hurt Acacia’s sales, the company said. ZTE accounted for 46 percent of Acacia’s sales in the first quarter.
The state awarded Acacia a $100,000 tax break in March after the company pledged to add 100 jobs during the next two years, part of an $8.7 million expansion plan that includes purchasing more manufacturing equipment. Acacia presently employs about 170.
Cambridge-based venture capital firm Matrix Partners is Acacia’s largest stockholder, with 39 percent of its shares. Acacia is led by chief executive Raj Shanmugaraj, who joined the company in 2010 after serving as a vice president at Alcatel-Lucent USA Inc.
Curt Woodward can be reached at curt.woodward@globe.com. Follow him on Twitter @curtwoodward.
