Given LinkedIn’s spectacular IPO today, we have posted the other software IPOs from 2011 as of the close of Q1 to provide investors with additional context. This excerpt is from our complimentary Q1 2011 Software Industry Equity Report which can be downloaded here: https://softwareequity.com/research_reports.aspx
Four software companies were newly listed on major U.S. exchanges in 1Q11, a marked improvement over 1Q10’s one software IPO, but not as robust as 3Q10’s seven IPOs. 1Q11’s new public market entrants were Qihoo 360 Technology, Cornerstone OnDemand, Demand Media and Trunkbow International Holdings. Collectively, the first quarter’s four IPOs raised $483.4 million and garnered a median 15.7x EV/Revenue multiple on their offering dates.
By the close of Q1, the four newly listed companies had a median return of -1.6%. The best performer was Cornerstone OnDemand, returning 40.2% by the quarter’s close, as investors chose to ignore its negative operating margin in favor of an impressive TTM revenue growth of 49.1%. Trunkbow International Holdings returned -18.6% at the close of 1Q11, with the majority of the drop coming on the last day of the quarter when its stock dropped a staggering 17.6% after the Company provided a disappointing earnings report (Figure 16).