Software // Enterprise Applications
01:22 PM

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.

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
Building A Mobile Business Mindset
Building A Mobile Business Mindset
Among 688 respondents, 46% have deployed mobile apps, with an additional 24% planning to in the next year. Soon all apps will look like mobile apps and it's past time for those with no plans to get cracking.
Register for InformationWeek Newsletters
White Papers
Current Issue
Top IT Trends to Watch in Financial Services
IT pros at banks, investment houses, insurance companies, and other financial services organizations are focused on a range of issues, from peer-to-peer lending to cybersecurity to performance, agility, and compliance. It all matters.
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on for the week of July 24, 2016. We'll be talking with the editors and correspondents who brought you the top stories of the week to get the "story behind the story."
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.