Earlier in the day, Salesforceby 20 percent to $9 to $10 a share. But strong investor interest pushed the price even higher, with the customer relationship management, or CRM, software company setting the price at $11 a share--a 29 percent increase from its initial range.
At that price, Salesforce.com's IPO is expected to raise $110 million--a move that could bode well for the beleaguered tech IPO market. Many investors are hoping that initial public offerings from Salesforce.com and search kingpin Google will set the stage for a comeback in the technology sector.
The company's shares will begin trading Wednesday on the New York Stock Exchange under the ticker "CRM."
"Salesforce is a very big plus for the market," said David Menlow, president of the IPO Financial Network, a research firm. "The tech sector is the area where there is the greatest growth potential for IPOs. People are hungry for tech offerings."
Salesforce hadat between $7.50 and $8.50 a share, hoping to raise as much as $85 million. But with prospective investors indicating strong interest in the offering, the company's investment bankers raised the range.
The date of the stock offering has beenmore than once in the face of from the U.S. Securities and Exchange Commission. In April, SEC regulators told the company to realign its methods of accounting for sales commissions, and last month, the agency voiced concerns over a profile of its founder that appeared in The New York Times.
Salesforce plans to offer 10 million shares with its IPO--10 percent of the company. The IPO is being led by Morgan Stanley, along with Deutsche Bank, UBS Investment Bank, Wachovia Securities and William Blair & Co.
The company's principal product is its subscription-based software, which follows a usage model that's gaining popularity among corporate buyers. Success at Salesforce and similar companies could pose a challenge to such old-guard software makers as SAP, Siebel Systems, PeopleSoft and Oracle.