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NetSuite IPO Flies Up, Up and Away

They've had practice saying that lately about VMware and VMware is in a lot better place than NetSuite

After an initial stumble or two NetSuite managed to make it to a hysterically successful $35.50 on its first day trading as a public company on Thursday.

That loud swooshing sound you heard was the opening price of Larry Ellison's unprofitable software-as-a-service play being jacked up from $13 to $26 a share - then moving up another $9.50 its first day out.

The venture, a Saleforce.com and Intuit rival, increased its coming-out price three times in the hours before its Google-reminiscent IPO-by-auction December 20.

First on Tuesday the number went from $13-$16 to $16-$19 and then on Wednesday to $19-$22 only to finally settle Wednesday night at $26 (after Oracle posted its latest glorious numbers), meaning NetSuite has raised almost $161.2 million and got itself a market cap of upwards of $1.5 billion - more than enough to pay Larry back the $8 million it owes him.

The auction was supposed to price the shares closer to their actual market value than a typical IPO, which usually prices shares at a discount.

Naturally, there are those who say the thing is overvalued. They've had practice saying that lately about VMware and VMware is in a lot better place than NetSuite.

Ah, but the glamour of the Ellison name.

At the opening, Larry's piece of NetSuite was worth $844 million. NetSuite CEO Zach Nelson is now worth upwards of $54 million and its CFO Evan Goldberg more than $117 million. Ellison put $100 million in the start-up.

NetSuite, which is $242 million in the hole after nine years in business - down $20.6 million the first nine months of the year on $76.8 million in revenues - is trading on the New York Stock Exchange under the chi-chi ticker symbol "N."

This Year AJAXWorld Is Sponsored by More Than 60 Leading Rich Web Technology Companies
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More Stories By Engin Sezici

Engin Sezici is a travelling blogger-at-large, who held corporate positions at SYS-CON Media from 1995 through 2004. Engin, who retired in 2004, likes to travel through Europe and Greek Islands, reports on technology subjects from around the world and lives on a private island in the Bahamas wih his twin brother when he is not on the road. You can reach him at engin(at)sys-con.com.

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