It’s hard to believe that IPOs that actually price are such good news, but they’re so few and far between lately that we feel compelled to report. This year has just been a disaster on the offering front, so today’s activity is notable not just for its rarity, but for being in an industry in which the IPO exit is an absolute linchpin: technology.
After the jump, the companies that broke the dry spell and, of course, the counsel on the deal.
The first company, which is getting most of the hype, is OpenTable, which allows customers to make online dining reservations. On Tuesday, the company filed its going-effective S-1/A and raised its range by 30% to $16-$18 (from $12-$14). The final offer price ended up being higher even than that, at $20 ($18.60 net to the company).
It ended up being a wild day – OpenTable arguably left $30 million on the table. Despite pricing above the range and raising $60 million, the stock closed up another 50%, to $31.50.
OpenTable has been on the radar for a while, as we mentioned above. Back in February, Jonathan Wegener wrote a piece with everything you need to know about the company.
Patrick Pohlen (Iowa St. BA ’81, Iowa JD ’84) of Latham & Watkins represented OpenTable and Alan Deneberg (McGill ’82, Osgoode LLB ’85, Columbia LLM ’86) of Davis Polk represented the underwriters, which were led by Merrill Lynch and Allen & Co.
The other company to go public is SolarWinds, a network-management software company, which priced at $12.50 and closed up 10% to $13.79.
SolarWinds was represented by Paul Tobias (Texas BA, JD) and Robert Suffoletta (Indiana BS ’82, MBA ’83, Notre Dame JD ’90) of Wilson Sonsini. Fenwick & West‘s Laird Simons (Haverford BA ’70, Harvard JD, MBA ’74) and Robert Freedman (Bowdoin AB ’87, Stanford JD ’93) represented the underwriters, led by Goldman Sachs.
Despite today’s good results, there are always seeds of doubt:
Just six venture-backed start-ups went public last year, the fewest since 1977 and down from 86 in 2007, according to the National Venture Capital Association. The last such company to go public was Rackspace Hosting in August. Shares of that company are down 6 percent since then.
“Some people may say this is great, but I think two I.P.O.’s is just not enough to feel like anything has changed,” said Mike Kwatinetz, a general partner at Azure Capital Partners. “We don’t want this to distract us from the fact that there’s been a radical change” that needs to be reversed, he said.
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