NetSuite Raises $185.4 Million In IPO - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Software // Enterprise Applications

NetSuite Raises $185.4 Million In IPO

Based on its IPO price, NetSuite's market capitalization is about $1.5 billion. Oracle chief executive Larry Ellison remains the majority stockholder.

NetSuite, which is controlled by Oracle chief executive Larry Ellison, said Wednesday it raised $185.4 million in its recent initial public offering.

The company, which offers business applications over the Internet, said it sold 6.2 million shares of common stock for $26 a share. In addition, underwriters exercised their option to buy an additional 930,000 shares -- 565,000 from the company and 365,000 shares from stockholders.

The total amount raised from the IPO was $185.4 million, before the deduction of underwriting discounts and estimated expenses paid by NetSuite, the company said. Underwriters were led by Credit Suisse Securities, and W.R. Hambrecht acted as co-manager.

Based on its IPO price, NetSuite's market capitalization is about $1.5 billion, according to the Reuters news agency. About 10% of the company's outstanding shares were offered in the IPO.

Ellison remains the majority stockholder. The company plans to use money from the public offering to pay down a line of credit from an Ellison-controlled company and for capital expenditures, including a second data center, Reuters said. The line of credit had a balance of $8 million as of Sept. 30.

Ellison co-founded NetSuite in 1998 to test the market for business applications offered through a software-as-a-service model. NetSuite offers accounting, payroll, order management, and customer-relationship management software.

NetSuite has never posted a profit. The company reported a net loss of $35.7 million for 2006, and $20.6 million for the first nine months of this year. While SaaS vendors can offer a much more affordable option to licensed software, they also face the challenge of turning a profit on an annual subscription model where revenues trickle in at a rate oftentimes outpaced by operational costs.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Slideshows
10 Ways to Transition Traditional IT Talent to Cloud Talent
Lisa Morgan, Freelance Writer,  11/23/2020
News
What Comes Next for the COVID-19 Computing Consortium
Joao-Pierre S. Ruth, Senior Writer,  11/24/2020
News
Top 10 Data and Analytics Trends for 2021
Jessica Davis, Senior Editor, Enterprise Apps,  11/13/2020
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
Why Chatbots Are So Popular Right Now
In this IT Trend Report, you will learn more about why chatbots are gaining traction within businesses, particularly while a pandemic is impacting the world.
Slideshows
Flash Poll