Salesforce.com Files Amended Prospectus
In an amended prospectus filed with the Securities Exchange Commission today, Salesforce.com cautioned investors that the company "could be required to repurchase securities sold in [the initial public] offering" due to a
New York Times article featuring an interview with Chairman CEO Marc Benioff. Publicity regarding Salesforce.com or the offering during the waiting period could be held to be "gun jumping" in violation of the Securities Act of 1933.
"You should only rely on statements made in this prospectus in determining whether to purchase our shares," the amended prospectus says its section on risk factors.
The company, citing the quite period surrounding IPOs, would not comment on the amended prospectus. The new filing cites the
New York Times
article "It's Not Google. It's That Other Big I.P.O.," dated May 9, 2004, for revealing information regarding the company's IPO and the company itself.
The article included quotes from Benioff regarding the development of Salesforce.com and its business strategy. Portions of the article were subsequently reprinted by a number of news outlets.
"While some of the factual statements about Salesforce.com in the article are disclosed in this prospectus, the article presented statements about our company in isolation and did not disclose many of the related risks and uncertainties described in this prospectus," the amended prospectus says.
"In addition to the
New York Times article, there has been substantial additional press coverage regarding us and this offering during the offering process. These articles also presented statements about our company in isolation and did not disclose many of the related risks and uncertainties described in this prospectus," the prospectus adds.
On May 13, shortly after the
New York Times article appeared, the company stopped progress on its IPO to allow for a "cooling off" period following Benioff's comments.
Chris Selland, vice president of sell-side research for Aberdeen Group, doesn't expect the amended prospectus to have any negative effect on the IPO, saying the filing was made so the company could legally cover itself in the wake of heightened SEC scrutiny on publicly traded companies.
The company's IPO could occur in one to two months, barring a market downturn. Companies often delay or cancel IPOs during market downturns.
RightNow Technologies, another CRM provider, filed in May for an IPO, and NetSuite is expected to later this year, according to Selland.
Salesforce.com's initial prospectus set the initial IPO at 10 million shares, at an estimated price of $7.50 to $8.50, figures that remain unchanged in the amended prospectus. The company's proposed New York Stock Exchange ticker symbol is CRM.
The company expects to use the proceeds from the stock offering for general corporate purposes, including working capital and capital expenditures. In the amended prospectus, the company said it might also use a portion of the net proceeds to fund possible investments in, or acquisitions of, complementary businesses, services, or technologies.