Niku Corp. shares exploded up 45 19/64, or 189 percent, to 69 19/64 in early trading Tuesday after the information technology services firm priced its 8 million-share offering at $24 a share.
Niku (Nasdaq: NIKU) doubled its price range from $10 to $12 last week.
Through its software and online marketplace, Niku allows professional services companies to share knowledge, learn from past mistakes and manage IT projects so they are done on time and on budget. Target markets for Niku include consulting, financial services, medicine, law, engineering and advertising. Niku also provides an online marketplace for services.
Like most companies filing to go public, Niku has big losses. As of Oct. 31, 1999, the company had an accumulated deficit of $16.6 million and three customers -- USinternetworking (Nasdaq: USIX), Sybase (Nasdaq: SYBS) and SalesLogix (Nasdaq: SLGX) -- accounted for half its revenue.
Including recent acquisitions, Niku lost $32 million for the nine months ending Oct. 31 on sales of $12.3 million. Niku bought Proamics Corp. in December 1999 and Legal Anywhere in January 2000 and will carry goodwill expenses for the next three to five years.
In its regulatory filings, Niku said it competes with internal IT departments and in-house developers, as well as companies such as Hotjobs.com (Nasdaq: HOTJ), EDS (NYSE: EDS), Oracle (Nasdaq: ORCL) and PeopleSoft (Nasdaq: PSFT).
Niku has already enlisted some big customers. The company counts consultants Comdisco (NYSE: CDO) and Inforte (Nasdaq: INFT) as customers. It also has Business Objects (Nasdaq: BOBJY), Computer Associates (NYSE: CA), EMC (NYSE: EMC), and Gateway (NYSE: GTW) on its client list.
According to the U.S. Department of Commerce, the gross domestic product of the professional services industry, including business, health, legal and educational services, exceeded $900 billion in 1997.
Goldman Sachs is the lead underwriter for the offering; Dain Rauscher and Thomas Weisel are co-managers.