The stock value of Workday Inc (NYSE:WDAY) continues to soar in its second day of trading, following its more than 70 percent jump from its initial public offering (IPO) price of $28 per share on Friday.
On Monday, Workday Inc (NYSE:WDAY)’s shares reached as high as $53 per share, a gain of $4.31 from its previous closing price of $48.69 per share during its debut. The company’s market value is currently around $8.5 billion.
During its initial public offering, the company raised $637 million from the sale of 22.8 million shares, at a price of $28 per share, higher than its target price range of $24 to $26 per share. Analysts believed that the company would be able to sell additional 3.4 million shares within the next 30 days. The company has 160.3 million outstanding shares after its IPO.
Aneel Bhusri, co-founder, chairman and co-executive of Workday Inc (NYSE:WDAY) said, “A lot of companies are conservative, and maybe got burned in the Internet bubble 10 years ago. Companies they worked with went out of business.”
Workday Inc (NYSE:WDAY) develops and sells cloud-based software, used for human resources and corporate financial systems. According to Bhusri, “being public matters”, when companies, like Workday, aim to sell their products to big corporations.
Bhusri added that his company, and some of the other enterprise software companies, will serve as a challenge for bigger enterprise software companies, such as Oracle Corporation (NASDAQ:ORCL) and SAP AG (NYSE:SAP), in delivering software services to customers via cloud. He described the Oracle and SAP products as a “mishmash” of different types of software.
According to him, the incumbent and big software enterprise companies are not prepared with the entrance of new companies in the industry. He said, the Workday Inc (NYSE:WDAY) IPO completed the four-part model of cloud-based enterprise software. The customer-facing software is the first model offered by Sales.com. The HR and financial systems software is the second model offered by Workday. ServiceNow is offering the third model, which is the information, technology automation cloud, and the fourth model is composed of industry specific applications, developed by independent consultants and in-house engineers.
Bhusri said, “From a customer standpoint, if you can get the best of breed from each, throw in Google for e-mail and documents, how is that not better? How is a large vendor going to compete? He added, “This is the start of a 20-year battle. The incumbents are not prepared.”