Shares of Microsoft-backed Rubrik jump as much as 25% on first trading day

Rubrik, which priced shares on Wednesday at $32, saw them climb as high as $40 on Thursday in the stock’s first full day of trading. Shares closed at $37, still a gain of nearly 16%.

The Microsoft-backed tech firm initially was seeking a price range of $28 to $31, according to its S-1 filing with the Securities and Exchange Commission. The public offering, which was 20 times oversubscribed, pushed the company’s value to roughly $5.6 billion.

Jay Ritter, a finance professor at the University of Florida’s Warrington College of Business, explained that Rubrik’s initial gains appeared a bit muted compared with those of other popular tech stocks largely because of institutional interest. Also, he said, according to his own research, it’s a trend he’s noticed among companies with revenue of at least $100 million.

“This is a company that mainly institutional investors are interested in,” Ritter told Fortune. “It doesn't have big household-name recognition like Reddit. So, basically, institutional investors are setting the price here, and institutional investors get it right on average.”

Rubrik last year posted annual revenue of $784 million. However, the company isn’t yet profitable, reporting a net loss of $97.5 million for the quarter ending Jan. 31. A year earlier, that figure was $86 million.

“This shows that the market is willing to purchase money-losing but growing tech companies that have large future profit potential,” Ritter added.

Rubrik’s IPO is the latest in a run of tech IPOs that have helped reinvigorate the public markets. Last week, Walmart-backed Ibotta was able to raise $577 million when it set an above-range offer price of $88, and then its shares jumped 17%. In March, after their own IPOs, the social media company Reddit saw its shares gain 48% and those of chip firm Astera Labs rocketed 72%.

This story was originally featured on Fortune.com