Demandware (s DWRE) who? Yeah, that is exactly what I thought. However, a tweet from financial and venture industry observer Dan Primack alerted me to the initial public offering of this Burlington, Mass.-based e-commerce platform provider that sells its services to folks like Barneys, Crocs and Tory Burch. The IPO has priced at $16 a share which values the company at $448 million. The company is raising $88 million.
The company lost money on mere a $56 million in 2011 revenue, a sign that Wall Street is ready to punt on even marginal technology IPOs — so expect more of those to follow in coming months. Jim Cramer on CNBC’s Mad Money show said that one should not confuse a “trade with an investment.” In other words, buy at the time of IPO and then flip it. Buying later is a sucker’s bet. About Demandware, Cramer said, that if the stock priced below $15 it is good. “Anything more than that and there might not be enough juice to merit buying,” he said. Oops!
Update: Glen Moore on Twitter tells me that Demandware founder is none other than Stephan Schambach, who in the past founder Intershop and took it public in 2000. Well, this is better timing.
4 thoughts on “What Demandware IPO says about Wall Street & tech IPOs”
Didn’t marginal tech IPOs lead us to a “correction” a little over a decade ago? Do you think history could be repeating itself?
History, indeed does repeat itself, though I am not prescient enough to predict the future. I would leave that to procrastinators like Cramer.
Thank you again Cramer for causing me to procrastinate. I had 1000 shares lined up and when he made that comment about 15 being the max, he gave me cold feet. 10k bye bye. Doh! I am so done with Cramer.
In a press release, Venda leveled the accusation that Demandware previously “did not clearly represent” the nature of the competition between the two companies in the company’s S-1 filing with the SEC. Oops.