Abstract:
NetSuite IPO was filed with Securities and Exchange Commission of USA in the year 2007, mainly to raise working capital for the company. NetSuite thought that this Initial Public Offering process will help the company in repaying its loans and in recovering the losses generated in the last few years.
NetSuite IPO refers to the Initial Public Offering of the Customer Relationship Management Company NetSuite. This company of USA not only provides Customer Relationship Management (CRM)services, but also offers Enterprise Resource Planning(ERP) softwares and e-commerce services.
Reason Behind IPO Filing
NetSuite did an IPO filing with Securities and Exchange Commission(SEC) of USA in the year 2007, with the aim of raising a market capital worth $75 million. The company decided on this IPO filing following its record of generating continuous loss over the last few years.
Inspite of recording continuous revenue increase, the company failed to generate profit and suffered from loss in the year 2006. NetSuite earned revenue worth $67.2 million in 2006. This figure reflected a 84.6% increase in revenue compared to the previous year. But, still, the company generated a $23.2 million loss in the year 2006.
Other than loss, there was another reason behind this IPO filing of NetSuite. The company was carrying a burden of loan repayment. NetSuite had the responsibility of repaying the outstanding balance of its secured line of credit with Ellison's Tako Ventures. Moreover, the company was also worried about raising working capital. So, in this situation, NetSuite discovered IPO filing as a feasible solution to all its' problems.
IPO Filing Process
NetSuite went for an auction style IPO filing in the year 2007. This Initial Public Offering was termed as auction style initial public offering as the company did not fix the price range of its' shares when it filed the IPO with SEC. At the time of filing IPO, NetSuite did not declared the number of shares that it was going to sell.