NetSuite Open IPO
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(Update Dec 18) The company raised its IPO price range: now it’s between $16 and $19. I am NOT bidding it.
WR Hambrecht sent me an email about Open IPO. This got me to read its prospectus. NetSuite is a new kind of software company co-founded by Larry Ellison, the founder and chairman of Oracle. By new I meant they provide “software as service”, vs. the tradtional software companies such as Microsoft, in which a consumer buys product, install it, do some customization, and (possibly) run updates, etc. Quote its prospectus:
“NetSuite is a leading vendor of on-demand, integrated business management application suites for small and medium-sized businesses. We provide a comprehensive suite of enterprise resource planning, or ERP, customer relationship management, or CRM, and e-commerce capabilities that enables customers to manage their critical back-office, front-office and web operations in a single application…We deliver our suite over the Internet as a subscription service using the software-as-a-service or on-demand model. Our revenue has grown from $17.7 million in 2004 to $67.2 million in 2006. For the nine months ended September 30, 2007, we had revenue of $76.8 million. As of September 30, 2007, we had over 5,400 active customers…”
Personally I have been losing money in my WR Hambrecht acct., thanks to the XFML IPO and GSIT (bought at open market on its IPO day). It appears to me since Google there are not many good open IPOs (MorningStar is one). Interactive Brokers (IBKR) did not turn out to be as strong as I expected. I am thinking about bidding a few shares on NetSuite. For the sake of Larry and the proposed ticker N.
Here is an interesting article from ZDNet (author: Dan Farber) explains software as service, and two leading providers SalesForce and NetSuite. Profile and online roadshow from ipohome. For comparison purpose (we all like comparison shopping), here is prospectus for SalesForce (CRM) more than 3 years ago. The following picture explains what NetSuite does.