Wednesday, November 14, 2012

JIVE, Social Software Maker, up 24% on Debut

Shares of software maker Jive Software (JIVE) are up $2.90, or 24%, at $14.90 in their first day of trading after the company’s initial public offering priced at $12.

Jive, founded in 2001, sells software for corporate networks that’s meant to provide for a form of social networking among colleagues, by forming “communities” around a project, say, and engaging in ongoing discussions of tasks and such.

Jive is a bit of a “pure play,” as they say, on corporate software’s attempt to get in on the Facebook excitement. (CRM), for example, offers a program called “Chatter” to accomplish something similar, as well as a collaborative task management program called “Do,” while Tibco (TIBX) sells something called “Tibber.”

Jive made $54.8 million in revenue in the three months ending in September, and had a net loss of $38 million, according to the company’s prospectus.

Jive’s $135 million offering was underwritten by Morgan Stanley, Goldman Sachs, Citigroup, UBS, BMO Capital Markets and Wells Fargo.

With 57.3 million shares outstanding after the offering, Jive has a market cap of about $854 million.

In a note to clients this morning, Wedge Partners’s Ryan Hunter writes that the stock is reflecting a multiple of eight times trailing revenue and four times what he thinks will be next year’s $135 million in revenue. He believes that’s “a very reasonable valuation for a company that we believe is uniquely positioned as the leading pure-play vendor of Social Enterprise technology.” Hunter projects the company’s revenue rising 70% or more over the next three years.

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