IPO of ServiceNow prices above range

by Jack Bibey | Saturday, Jun 30, 2012 | 528 views

ServiceNow, the IT software firm has priced its IPO above the expected price range of $18 , according to an underwriter with knowledge of the matter, In the first big technology IPO after Facebook went public in May, ServiceNow, the San Diego, California based firm managed to raise $209.7 million. While the company had intended to range the pricing at $15-$17, the pricing of 11.65 million shares went as planned.

The offering for ServiceNow is being viewed as an important test for Morgan Stanley, whose image took a blow after the fallout of the Facebook IPO. Its reputation as a premier bank for technology based deals was heavily scrutinized in the markets. The shares of Facebook , which had been priced at $38, have declined as much as 33 % from their IPO pricing and they just have managed to recover in the last few weeks.

A successful ServiceNow IPO could mean a revival of the broader technology IPO in US markets and provide a push out to issuers in the likes of Palo Alto Networks, the software security firm, which is expected to go public in late July. Experts in the markets are of the opinion that ServiceNow IPO is a harbinger for the overall investor Sentiment linked to the technology stocks for the next 3-6 months.

ServiceNow is going public in a period when there has been a slowdown in the IPO activity globally and setting aside the Facebook IPO, there has been a decline of 45 % in the IPO activity this year as compared to the same period last year. This is definitely one of the high profile offerings that is in the pipelines and if the firm doesn’t perform well then it could be a bad omen for the IPO market in the US, according to one of the senior analysts.

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