At 1 p.m. PST, the end of regular trading, Ariba, an early player in the business-to-business market, closed up $30.28 or more than 10 percent to $329.97. Earlier today, Ariba saw its shares touch $333, setting an all-time high.
The Mountain View, Calif.-based company announced that its board of directors has approved a 2-for-1 stock split to be effected in the form of a stock dividend after yesterday's market close. Ariba develops complex procurement software and systems that enable companies to buy and sell goods over the Internet.
In recent research notes, analyst Bob Austrian, at Banc of America Securities, boosted his price target on Ariba from $250 to $360 and reiterated a "strong buy" rating on the company's stock. Austrian also lifted his price target on Commerce One to $300 from $275.
He said while investors may be concerned about the stability of Ariba's position as larger, more established technology providers move into the market, he remains "bullish on Ariba" and believes Ariba, along with Commerce One, will "remain in a strong position" due to their head start in the market.
The company competes head to head with rival Commerce One in a lucrative market that has recently caught a whirlwind of attention from several technology providers and manufacturing giants as they partner to create large, industry-specific trading exchanges.
Ariba has been making an aggressive move in that market, partnering with several companies to produce large online exchanges that connect a massive number of suppliers and buyers in one industry-specific marketplace, aiming to cut internal purchasing and other supply-chain costs.
Earlier this week, Ariba added the travel and transportation industry to its collection of marketplaces after it teamed with Sabre, a company that operates a large, online travel reservation system. As part of the deal, the two companies plan to build an online exchange for the travel and transportation industry. In recent months, Ariba has also inked deals to build trading exchanges targeting the oil and gas, pharmaceuticals and chemical industries.
The company's stock split will affect stockholders as of March 20. Ariba said it expects the split to be effective on or about March 31. The stock split will increase the number of outstanding shares from approximately 92 million shares as of yesterday to about 184 million shares, the company said.