Workday IPO Pops 72% On Open

Workday
  soared on its open in early trading Friday morning, opening at $48.05 per share, or 71.6%, from its pricing last night.

The stock was recently trading at $48.02 on the New York Stock Exchange. The cloud human resources and finance technology company priced its initial public offering above its expected range at $28 per share last night, up from an expected $24 to $26 per share.
The IPO was valued at $637 million, with 22.75 million Class A shares sold. At its initial IPO price, Workday would have a market capitalization of about $4.5 billion. At its open this morning, the market capitalization would be about $7.7 billion, not including over-allotments of stock. Morgan Stanley and Goldman Sachs are leading the offering. Underwriters have a 30-day option to purchase up to an additional 3,412,500 shares of Class A common stock to cover over-allotments.
The Pleasanton, Calif. company sells cloud-based human resources, payroll and financial management tools, and other related products.
Workday is one of the most closely watched IPOs since Facebook’s May IPO, which sent investors running from technology IPOs, particularly consumer Internet companies, after its dismal performance. However, Workday’s IPO is the clearest sign yet of the relative strength of new enterprise technology companies. Others such as Splunk, ServiceNow and Palo Alto Networks have done relatively well riding the larger move towards cloud computing.
Cofounders David Duffield and Aneel Bhusri, who is also a partner at Greylock, are the largest shareholders and will have  61.0 and 68.2 percent voting power, respectively, in the company after the offering. Billionaire Duffield’s stake as of last night was worth $1.96 billion, my colleague Ryan Mac reports. Duffield previously cofounded PeopleSoft, which was acquired by Oracle for $10 billion in 2005 after a takeover battle.
Workday posted $119.5 million in revenue in the six months ending July 31, up from $54.8 million in the year-ago period. The company posted a net loss of $47.3 million over the six months ending July 31, compared to $36.3 million in the comparable period.
The largest institutional shareholders are venture capital firms Greylock Partners, with 15.2 million shares and New Enterprise Associates, with 13.9 million shares. Neither are selling in the offering.
Workday is trading on the New York Stock Exchange under the ticker WDAY.
source: forbes.com

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