A weakened SentinelOne considers selling

On August 21, 2023, sources close to the matter told Reuters that the SentinelOne cybersecurity firm was considering selling off all assets. The investment bank Qatalyst Partners is reportedly advising SentinelOne in its discussions with potential buyers, particularly private equity firms.

Founded in 2013 in Israel, SentinelOne set up shop in Mountain View, California. The company markets AI-based threat detection tools that identify unusual behavior in corporate networks. Funded by Third Point, Tiger Global and Sequoia Capital, the company’s 2021 IPO did not go unnoticed in the NYSE.

However, since then, the clouds have been gathering over the former startup. SentinelOne is keeping fees low to attract new customers, but the company is still not profitable. Moreover, in June 2023, SentilOne admitted to overestimating yearly recurring revenue (and thus balance sheet). In their last quarterly report, the firm revised projected earnings downwards for the year, and announced they would lay off 5% of staff.

This information has discouraged investors, and SentinelOne shares have lost 80% of their initial value. Yet in the context of a growing worldwide cybersecurity market, Morgan Stanley considers the company undervalued.