Magazine article CRM Magazine

NetSuite's Sweet Ride Takes Another Turn: After What One Analyst Called a "Painfully Long" Anticipation, the On-Demand CRM Vendor Finally Goes Public

Magazine article CRM Magazine

NetSuite's Sweet Ride Takes Another Turn: After What One Analyst Called a "Painfully Long" Anticipation, the On-Demand CRM Vendor Finally Goes Public

Article excerpt

The wait was finally over, but the moves kept coming: Years after its first steps to become a public company, on-demand CRM vendor NetSuite raised its offer price twice during an initial public offering (IPO) built around a Dutch auction. Then the price tag still moved nearly $10 per share higher on December 20, its first day of trading on the New York Stock Exchange, where it had landed a prestigious single-letter trading symbol (N). By its second day, the stock had nearly reached $46. And while some of the early headiness has dissipated--at press time, the stock had tumbled back to the neighborhood of its debut price, in the mid $20s--the marketplace's response continues to fortify NetSuite's position as a key player in the software-as-a-service (SaaS) industry and, in turn, gives credibility to the still-emerging market of SaaS solutions.

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According to Scott Sweet, senior managing partner at stock research firm IPO Boutique, the delay was partly attributable to concerns regarding a conflict of interest for NetSuite's majority shareholder, Oracle Chief Executive Officer Larry Ellison. "It's very rare that a person is the majority shareholder in more than one company," Sweet says; only after Ellison agreed to put his shares in a "lockbox" for several years could NetSuite finally proceed with its IPO.

As the last IPO of 2007, NetSuite's success was even more impressive because the market "has been very challenging and very difficult," Sweet says, adding that several other firms due to go public the same week had postponed their IPOs. …

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