Salesforce.com raises price range 20pc


22 Jun 2004

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The tech industry’s most long-awaited IPO, that of online CRM vendor Salesforce.com, just got spicier with the news that the company has raised the pricing range on its shares for tomorrow’s public listing. The company has boosted the range to US$9 to US$10 per share, seeking to raise up to US$100m through frantic share trading of more than 10m shares.

The public listing was delayed last month because the company’s chief executive Marc Benioff was featured in a New York Times article that may have violated securities rules meant to prevent companies from hyping up their stocks ahead of stock offerings.

The new pricing range is a 20pc increase on its original pricing range, which tech watchers say bodes well for the beleaguered tech IPO market. Market watchers hope that Saleforce.com’s IPO and that of web search giant Google.com will rekindle interest in tech stocks and set the stage for the sector’s comeback. Salesforce.com will trade tomorrow under the ticker: “CRM.”

It is understood that strong interest in the offering encourage the company’s investment bankers to increase the range.

For the first quarter of this year, Salesforce.com earned US$437k on revenue of US$34.8m, after earning US$3.5m on revenues of US$96m for all of fiscal 2004. Fiscal 2004 was the first year that the company was profitable.

The company’s IPO is being underwritten by Morgan Stanley, Deutsche Bank Securities, UBS Investments Bank, Wachovia Securities and William Blair & Company.

Assuming an offering price of US$9.50, Salesforce.com would have an initial market capitalisation of around US$961.9m.

By John Kennedy