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Strength in early trading shows public market demand for cloud-based enterprise companies
Jive Software kicked off a busy week in the U.S. IPO market, which is expected to reach 11 deals, including one big whopper by the social gaming company Zynga.
If Jive is any guide for public market interest in new growth stocks, it could be a very bullish week for initial offerings.
Jive Software, the social enterprise and collaboration software company, made its debut Tuesday on the Nasdaq under the ticker symbol JIVE, raising $160.8 million in fresh capital.
Jive opened at $16.50, a 27% jump from its IPO price of $12, which was also above an initially anticipated $8-$10 range. Volume in early trading was 13.4 million shares (significantly more than the expected 11.7 million). At the current price, Jive is trading at a market cap of $708 million.
The stock only saw moderate action, dipping as low as $14.72 before closing out the day at $15.06, more than 25% above the $12 IPO price, but 9% below the selling price at the opening bell.
The 11 year-old company's public offering was underwritten by multiple banking entities but was led by Morgan Stanley and Goldman Sachs.
This public offering came at a time when companies have pushed more funding toward enterprise software with a strong focus on the cloud. As it approached its IPO, Jive refocused its efforts from its behind-the-firewall services to its cloud offerings.
The Palo Alto-based software company has shown its strength competing in the same space as the giants of Salesforce and Microsoft with its disclosed $54.8 million in revenue for the nine months ending Sept. 30.
Chairman & CEO of Jive Software, Tony Zingale, holds a solid resume that give investors promise for the company to grow since he sits on the boards of Jive Software, McAfee Software, Coverity and Service Source and grew Mercury Interactive to a business with more than $1B in annual sales.
The company's third quarter of 2011 revenue was reported at $20.8 million, a 69% increase from the $12.3 million in the same quarter a year ago. But, Jive also reported a net loss of $7.6 million in the third quarter of 2011.
The company is currently not profitable and has announced that it does not expect to be so "in the foreseeable future" but is nonetheless expected to fair well on the market because of its cloud-based services.
Jive, which makes a software platform that has been out for four years, Jive Engage, and is used by big industry mainstays including Hewlett-Packard Co. and SAP AG, entered it IPO having raised $57.5 million for its enterprise social networks and cloud services.
Jive is the first tech company to debut in this week's hotly anticipated string of 11 IPOs and comes after several companies with cloud extensions have received funding, including the $15.5 million raised by Bills.com last week and Twilio snapped up $17 million for cloud computing.
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