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While it didn't exactly stir memories of 1999, Salesforce.com's long-awaited initial public stock offering didn't disappoint, either. Shares of Salesforce closed Wednesday at $17.20, more than 50% above their offering price.
The IPO of Salesforce.com, which sells online software that sales staffs can use to manage their leads, was delayed because of comments CEO Marc Benioff made to The New York Times last month, in violation of the Securities Exchange Commission's quiet period rules. Nevertheless, Salesforce.com's stock--which began trading on the New York Stock Exchange under the symbol "CRM"--got a Wall Street reception in line with that of other recent successful tech IPOs.
"It means that people are understanding that this brings new value to the table," says Yankee Group analyst Sheryl Kingstone of Salesforce.com's strong first-day showing. "It opens the door for the solidification of the [application service provider] model." The Salesforce.com IPO has been considered a potential gauge of the market for on-demand customer relationship management software, and analysts and competitors say it could validate hosted software. Salesforce.com rival RightNow Technologies already has filed for its IPO, and startup Salesnet is also said to be considering an offering.
On opening day Salesforce.com's stock was up $6.20 to $17.20, a 56.4% increase over the initial offering price of $11. More than 10.8 million shares changed hands.