June 22, 2004 6:47 AM PDT
Salesforce.com sets higher goal for stock offering
The company, which makes software for managing customer relationships, is expected to begin trading Wednesday on the New York Stock Exchange under the ticker "CRM."
The new pricing range is now $9 to $10 a share, which would put the company in line to raise as much as $100 million in its initial public offering.
That's about a 20 percent increase over its previous pricing range--a move that could bode well for the beleaguered tech IPO market. Many investors are hoping that initial public offerings from Salesforce.com and search kingpin Google will set the stage for a comeback in the technology sector.
"Salesforce is a very big plus for the market," said David Menlow, president of the IPO Financial Network, a research firm. "The tech sector is the area where there is the greatest growth potential for IPOs. People are hungry for tech offerings."
Salesforce.com had initially set its IPO range at between $7.50 and $8.50 a share, hoping to raise as much as $85 million. But with prospective investors indicating strong interest in the offering, the company's investment bankers raised the range.
The date of the stock offering has been postponed more than once in the face of challenges from the U.S. Securities and Exchange Commission. In April, SEC regulators told the company to realign its methods of accounting for sales commissions, and last month, the agency voiced concerns over a profile of its founder that appeared in The New York Times.
Salesforce.com plans to offer 10 million shares with its IPO, or 10 percent of the company. The IPO is being led by Morgan Stanley, along with Deutsche Bank, UBS Investment Bank, Wachovia Securities and William Blair & Co.
The company's claim to fame is its subscription-based software, which follows a usage model that's gaining popularity among corporate buyers. Success at Salesforce.com and similar companies could pose a challenge to old-guard software makers, including SAP, Siebel Systems, PeopleSoft and Oracle.