The long-rumoured and speculated Initial Public Offering (IPO) by Netsuite, the software as a service (SaaS) specialist, is at last underway. and it looks like it will use a novel way to determine the share price and the volume of shares to be issued.
The company has taken the first step in the IPO process by filling out a Form S-1 for the US Securities and Exchange Commission (SEC). This is the statement of intent to go for an IPO, and the actual process will only be initiated when the SEC has approved the application.
Till that point is reached there is, as part of the normal process in such matters, no word from the company or its advisors, Credit Suisse Securities (USA) LLC (acting as sole book-running manager for the offering) and WR Hambrecht + Co (acting as co-manager of the offering) as to the expected offer price or the number of shares to be issued.
But such numbers will also be determined by an online auction process NetSuite plans to use to gauge the number of shares it ought to issue and the price of each share. According to the company's statement on the SEC website, the plan is to use a "technology enabled" process to "conduct an auction to determine the initial public offering price and the allocation of shares in the offering. We plan to conduct this auction in five stages - Registration; Bidding; Auction Closing; Pricing; and Allocation. Investors that do not submit bids through the auction process will not be eligible for an allocation of shares in our offering."
Further details of the technology enablement required are not given, but anyone wishing to make a bid will have to start by contacting Credit Suisse, which may mean opening an account with the bank. ®