The company had an earlier plan of pricing 50.4 million shares for $30, however, Qualtrics ended up selling 51.7 million at $41.85 per share under the ticker “XM”.
Qualtrics International Inc, a cloud software vendor, has recorded a 51.7% surge on its debut on Nasdaq after raising $1.55 billion with an Initial Public Offering (IPO) to beat its initial expectation with a price above the estimated range. The company had an earlier plan of pricing 50.4 million shares for $30, however, Qualtrics ended up selling 51.7 million at $41.85 per share under the ticker “XM”. According to reports, the company had an estimated price range of $27 to $29 before the launch.
Qualtrics would have gone public two years ago but was acquired by SAP SE (ETR: SAP) for $8 billion which affected the original plan. The company has since then recorded a customer base of 13,000 from 9000. Its revenue in the first three months of 2020 increased from $289.6 million and 413.4 million in 2018 and 2019 respectively to $550 million. Its operating cost was reduced from $30.9 million through September 2019 to $24.9 million in 2020. Before the debut, Qualtrics amended its filing stating that its parent company may have touted its stocks which is against the regulations of the US Securities and Exchange Commission (SEC).
According to the amendment filing, Christian Klein, the Chief Executive of SAP made appearances that possibly promoted the Qualtrics stocks in his series of media appearances. His comments came at a time when Qualtrics was in a quiet period according to a mandated embargo on promotional publicity imposed by SEC.
The embargo strictly prohibits management teams or even marketing agents from voicing out their opinions or forecasting about the value of their company. Klein subtly recommended the shares to institutions after claiming it is oversubscribed. The company explained that when Klein spoke about the “potential doubling of the Qualtrics revenue after the SAP takeover, he was referring to the revenue attributed to Qualtrics as a reporting segment of SAP.”
The report further explained that since Klein was talking to the SAP shareholders, he took advantage of the information captured in the SAP financial statement.
Before its previous plan of going public in 2018, Qualtrics was able to raise $400 million with an IPO to send the company’s valuation to $4.3 billion. Just a few days later, Qualtrics was acquired by SAP for $8 billion. The company is expected to have a market valuation of $15 billion at the current IPO price. In the Qualtrics IPO filing, it was revealed that the XM platform has a lot of benefits to customers.
“Our XM Platform helps organizations both design and improve the experiences that turn their customers into fanatics, employees into ambassadors, products into obsessions, and brands into religions, ” it reads.
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