After filing their registration statement in August, Bazaarvoice began trading on the NASDAQ today. It’s the first Austin tech company to go public this year, with the most recent Austin tech IPO being HomeAway. The company initially looked an a $8 – $10 price for the stock, but it priced last night at $12 with initial trading this morning at around $16.
This is a great deal for Bazaarvoice and a great deal for Austin for many reasons.
Acquisition Offers. As a private company that was growing rapidly, Bazaarvoice was surely an acquisition target on everybody’s radar. Speculation runs rampant with questions like “Is IBM going to buy them?” An IPO puts much of that discussion to rest, or at least provides a very obvious number to the market value of the company.
Acquisition Currency. The company can now buy smaller competitors, or other technology companies that have complementary products for stock instead of cash. That is one major thing you just can’t do as a private company. Company stock is a great currency to use for acquisitions.
Employee Liquidity. As soon as the company’s trading lockup expires, employees with vested options will be able to turn their shares into cash. A rare feat that many attempt, but few achieve.
The Startup Circle of Life. Senior executives with significant stock positions who made millions will eventually depart and have enough money to fund and start their own technology companies. Even more important, they will have the experience and understanding of what it takes to build a high growth technology company. 3-5 years from now people will be talking about certain startups as “former Bazaarvoice people.”
Congrats to my many friends at Bazaavoice!