Switch, based in Las Vegas, runs data centers in Nevada, Michigan, Georgia and Texas. The company just took a big step toward public markets by filing for an initial public offering, or IPO, which is when a private company sells shares to the public for the first time.
The filing is confidential. The idea is to avoid public back-and-forth before the company decides whether the timing makes sense.
Big banks are lined up to manage the sale. Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase and Morgan Stanley are all on the IPO, though the lineup and timing can still change.
Switch has some well-known names behind it too. Ben Horowitz, who helped found the investment firm Andreessen Horowitz, is set to join the board, and Andreessen Horowitz is leading Switch's latest fundraising effort.
That matters because the same people who back private tech companies now have a seat at the table as Switch gets ready to sell shares publicly.
Not everything is locked in. Switch, Bank of America, Citigroup, JPMorgan and Morgan Stanley declined to comment, while Goldman Sachs and Andreessen Horowitz did not respond.
The potential price tag is what makes this filing stand out.
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A valuation close to $50 billion is a huge step up from the 2022 deal.
DigitalBridge still owns most of Switch, and it has its own deal-making history. SoftBank Group reached an agreement to buy DigitalBridge last year.
Switch is also joining a crowded field. Data center operators and the companies that supply them have raised money through U.S. IPOs this year.
In May, Blackstone Digital Infrastructure Trust Inc., a fund that buys data centers, took in $2 billion from a U.S. IPO.
Last month, Csquare Inc., backed by Brookfield Corp., collected $1.21 billion from its own IPO.
These data center IPOs happened within a few months of each other. A Switch listing would add another.
Together, those deals show that investors are willing to write big checks for data center businesses. That helps put the Switch news in context, because the $50 billion talk is not coming out of thin air.
Data centers are valuable because businesses need places to store and run their digital operations. A Switch IPO would give everyday investors a chance to own a slice of that business.
IPOs can also shift at the last minute.
Because the filing is confidential, Switch has not yet published the detailed financial information that usually accompanies a public offering. Investors will get their first close look at the company's numbers if the IPO moves forward, and those numbers could change the conversation.
Expectations can change quickly once a company starts showing the numbers behind its business. That is when investors get to see whether the hype matches reality.
If it does, a November debut would put Switch at the front of a wave that has already pulled in big money this year. For investors, the interesting part is seeing whether the next big data center name can live up to the build-up, because once the stock is in your portfolio, the real test begins.
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