NetSuite Remind You Of Anyone?... Almost & Not Quite (N, VMW, ORCL, EMC)

NetSuite (NYSE: N) is one we covered with a strengthening bid ahead of its IPO, but it priced at $26.00.  That is twice the initial price forecast.  Shares traded slightly lower at the open and then went back above the $26.00 pricing.  That 100% mark-up to the original price indications might be to blame for some of the trading uncertainty.  Traders are searching for a comparison here. 

This has much of the look and feel of EMC Corp. (NYSE: EMC) partial spin-off of VMware (NYSE: VMW).  In fact, traders are already drawing the parallel.  NetSuite is application software on-demand allowing companies to subscribing to services to use software on any device with an Internet connection instead of paying up to install programs on their own computers and maintain them.  Larry Ellison of Oracle backed NetSuite and he holds over half of the company. 

But the comparisons stop there for now.  NetSuite has a history of losses and the "virtualization" word is the term for the second half of 2007 and all of 2008.   Despite a sickly low public float in the number of shares, VMware has grown rapidly in a shorter period and is already profitable.

This is probably the last hot IPO of 2007, so enjoy this one while it’s here.  You can join our open email distribution list to hear about other hot upcoming IPO’s and back door plays, break-ups, spin-offs, and more previews for special situations.

Jon C. Ogg
December 20, 2007