THE DAY AHEAD: Selectica hopes to repeat FirePond's IPO success
Selectica, an e-commerce software vendor, is hoping to strike IPO gold this week just like its two main rivals have.
Selectica (Proposed ticker: SLTC) is offering 4 million shares expected to price between $9 and $11. Credit Suisse First Boston is the lead underwriter.
Judging from the IPOs of FirePond (Nasdaq: FIRE), up 278 percent from its Feb. 3 IPO, and Calico Commerce (Nasdaq: CLIC), up 230 percent from its Oct. 6 IPO, analysts said Selectica should do well.
Randall Roth, an analyst for Renaissance Capital, reckons Selectica will trade at a slight discount to FirePond, since revenue is lighter. FirePond reported sales of $12 million in the first quarter ended Jan. 31. FirePond's quarterly sales were more than Selectica had in the first nine months of 1999.
Aside from the usual buzzwords, here's what Selectica's software does: The software allows a customer to configure and select options on various products such as cars and PCs. In filings, Selectica said it makes Internet selling systems for complex products -- big-ticket consumer items and business-to-business products -- and helps the user with selection, configuration, pricing, quoting and fulfillment.
Not surprisingly, most of Selectica's customers deliver complex products. Customers include 3Com (Nasdaq: COMS), Allied Signal, Aspect Communications (Nasdaq: ASPT), BMW, Centigram (Nasdaq: CGRM), Cisco (Nasdaq: CSCO), Hewlett-Packard (NYSE: HWP), Redback Networks (Nasdaq: RBAK) and Sun Microsystems (Nasdaq: SUNW). The company is also partnered with leading systems integrators and software vendors such as BroadVision (Nasdaq: BVSN).
"The agreement with BroadVision will no doubt help them," said Roth.
For the nine months ended Dec. 31, the company reported sales of $9 million and a loss of $13.3 million. As of Dec. 31, the company had an accumulated deficit of $24.7 million. Like many young companies, Selectica relies on a handful of customers for much of its revenue. 3Com, Aspect Communications and Fireman's Fund Insurance accounted for 43 percent of revenue for the nine months ending Dec. 31.
The company, which has 269 employees, cites Calico Commerce, FirePond and Trilogy Software as the primary competition. BAAN (Nasdaq: BAANF), Oracle (Nasdaq: ORCL), SAP (NYSE: SAP) and Siebel Systems (Nasdaq: SEBL) are also likely to become competitors and could introduce pricing pressure to the market.
Aside from the competition, Selectica also cites some of its own hiccups as a risk. The company said it has had problems managing its accounting and financial reporting systems and the volume of customer contracts. Implementing its software has also been an issue.
Moving forward, the company said it would try to boost high-margin software licensing sales while cutting back on services. It also plans to expand internationally.
Infospace drops .com
Remember those days where every company tried to slap a .com on the end of its name? That fad seems to be ending pretty quickly.
In a move that wasn't noticed much last week, Infospace.com (Nasdaq: INSP) said it was dropping the .com from its name. Infospace said the .com didn't tell the whole story since it was positioned "as the global infrastructure company for commerce, communication and information on the Internet and on wireless devices."
The name change needs shareholder approval, which shouldn't be a problem. It's not like Infospace isn't trendy anymore. The company mentioned all the hot buzzword such as "infrastructure," "commerce," and "wireless" in its description.