Shares of SeeBeyond Technologies ( SBYN) fell Friday after the software-integration firm completed a public stock offering a day earlier.

The Monrovia, Calif.-based software provider said Thursday it completed the public offering of nearly 8.6 million shares of common stock priced at $9.57 a share. SeeBeyond raised about $60 million through the offering, boosting its cash position to more than $100 million. Two million shares were sold by a stockholder.

Shares of SeeBeyond fell 89 cents, or 9.5%, to $8.48 Friday, a day after fellow software-integration company BEA Systems ( BEAS) announced anemic earnings growth for the year. Since Jan. 29, when SeeBeyond announced the secondary offering, its shares have declined 28%.

Sale of the shares improved SeeBeyond's cash position, which company executives say has hampered their ability to close deals. CFO Barry Pelago estimated SeeBeyond lost between $5 million and $10 million in deals in both the third and fourth quarters. "Our competition was literally using that the company's cash position as the lead slide in their competitive presentations against us," he said.

Including a private common stock placement of $15 million in the fourth quarter, SeeBeyond reported only $47 million in cash and no short-term investments on its balance sheet on Dec. 31. The company posted its first profit, of $1.6 million, in the fourth quarter.

Pelago attributed the stock's drop Friday to the offering and a general decline of software stocks.


Burnt Offering
SeeBeyond's shares have fallen 28% since
announcing the new offering

John Ederer, a research analyst with Pacific Growth Equities, agreed a few things are at play with SeeBeyond. He said the additional shares may be having a short-term effect on the stock price, but in the longer term viewed the additional cash as "very positive" for SeeBeyond. Ederer has a buy rating on SeeBeyond; his firm was part of the syndicate involved in the secondary offering but was not a lead manager.

Ederer also suggested BEA Systems' forecast Thursday of nearly flat revenue in fiscal year 2003 may have pushed down shares of SeeBeyond and other middleware software companies. BEA was down 6%, Vitria Technology ( VITR) lost 1.8%, Tibco ( TIBX) was off 0.7% and webMethods ( WEBM) fell 2.5% in Friday's trading.

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