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Software IPOs: 2005 Year In Review

2005 was not a good year to be a corporate finance banker focused on the software sector as only 4 software companies went public.  Those few that did get out the door actually had real revenues and profits and almost all of them, save one, offered their software as a service ("SaaS") which is about the only thing that is exciting software investors these days.

3 out of the 4 software companies are trading above their offer price with the average stock up 40%.  This has more to do with how high the bar is for investors to even consider new enterprise software names than it does with improved underwriting standards.

The four companies that made it out of the gates were:

  1. SSA Global   Ticker:SSAG
    Issue Date: 5/26/05  Issue Price: $11.00
    Price Change
    : 65.4%
    : Private equity roll-up of out-of-favor enterprise software companies such as Baan, Ironside, Arzoon, etc.  Can that many wrongs make a right?
  2. Kenexa   Ticker:KNXA
    Issue Date: 6/24/05  Issue Price: $12.00
    Price Change
    : 75.8%
    : Provider of on-demand HR applications.
  3. Taleo   Ticker:Tleo
    Issue Date: 9/29/05  Issue Price: $14.00
    Price Change
    : -5.1%
    : Provider of on-demand HR applications.  Humm, this seems like a trend.
  4. DealerTrak   Ticker:TRAK
    Issue Date: 12/13/05  Issue Price: $17.00
    Price Change
    : 23.4%
    : Provider of on-demand car financing software to dealerships. Yup, "on-demand" is definitely a trend.

January 2, 2006 in Software, Stocks | Permalink

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The thoughts and opinions on this blog are mine and mine alone and not affiliated in any way with Inductive Capital LP, San Andreas Capital LLC, or any other company I am involved with. Nothing written in this blog should be considered investment, tax, legal,financial or any other kind of advice. These writings, misinformed as they may be, are just my personal opinions.