Signaling strong investor interest,
Tuesday boosted the range of the share price for its much anticipated IPO, which could price as early as this evening.
Salesforce.com disclosed in a regulatory filing that it expects its initial offering price to range between $9 and $10 a share. That's a 19% boost from the previous range of $7.50 to $8.50 a share, based on the midpoint of each range.
A source in underwriter Morgan Stanley's syndicate department said Salesforce stock is expected to price after the close Tuesday and then begin trading Wednesday.
Salesforce.com will trade on the
New York Stock Exchange
under the ticker "CRM", a reference to its product -- customer relationship management software.
Salesforce, which sells and delivers CRM software via the Internet on a monthly basis, plans to sell 10 million shares, raising between $90 million and $100 million.
"The company appears to be very much sought after, which could be one of the precursors to a price increase," said David Menlow, president of IPOfinancial.com.
"I think as more of these tech deals work out it certainly bodes well for the entire IPO market," Menlow added, although Salesforce's price range increase won't necessarily prompt other pre-IPO tech companies to follow suit.
The boost also could help Salesforce.com's stock enjoy a bigger pop when it actually begins trading, he said. "It might actually exacerbate the move to the upside because now people perceive it is a deal in demand."
On the other hand, Fulcrum Global Partners analyst Jamie Friedman recently advised investors to be cautious if the deal is greatly oversubscribed and the price revised upward.
On Tuesday, Friedman said the new price range still falls roughly within the valuation he calculated for Salesforce. He wrote last week that Salesforce would be fairly valued at $8.50 to $9.50, or six times fiscal 2006 sales and 31 times his 2006 earnings estimate.
"It seems to us like it could potentially be oversubscribed, in which case we want to introduce some price discipline," Friedman said Tuesday.
The price boost is the latest twist in Salesforce.com's on-again, off-again IPO. The company had planned to go public last month, but postponed that after an interview by CEO Marc Benioff with
The New York Times
red flags with the
Securities and Exchange Commission