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Demandware, Inc. Message Board

  • flankenking flankenking Mar 21, 2012 7:03 AM Flag

    Next overvalue joke: Demandware

    Demandware surges in trading debut after initial offering




    By Bloomberg News
    |
    March 15, 2012
    Demandware Inc., the e-commerce software provider that counts Barneys New York and Crocs Inc. as customers, surged as much as 63 percent in its trading debut after selling shares for more than planned in an initial public offering.

    The stock rose 50 percent to $23.97 at 11:25 a.m. in New York trading after earlier climbing to $26. Demandware, based in Burlington, sold 5.5 million shares at $16 apiece Wednesday, a statement shows. The company earlier offered the shares at $12.50 to $14.50 each.

    The software maker, run by chief executive Thomas D. Ebling, generated $56.5 million in sales last year, more than a sevenfold increase since 2008.



    The company is at least the fifth software maker to go public in the US this year, according to data compiled by Bloomberg. Guidewire Software Inc. has more than doubled since its debut in January, while AVG Technologies had fallen 14 percent through yesterday since going public last month.

    Goldman Sachs Group Inc. and Deutsche Bank AG led the offering. North Bridge Venture Partners LP and General Catalyst Partners, which each held 32 percent of Demandware before the offering, now own about 26 percent apiece.

    Demandware plans to use proceeds from the sale for financing growth, working capital and general corporate purposes. The shares are listed on the New York Stock Exchange under the symbol DWRE.

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    • “Fourth quarter revenue of $25.5 million represented a gain of 22% over the third quarter and a 64% gain over second quarter. Strength in local product search and display, as well as, better optimization of our ad partners, contributed to the strong results. The company entered 2011 with significant monetization challenges, which were reflected in our first half 2011 results. We responded aggressively to these challenges by diversifying our revenue partners, entering new ad markets, expanding our product suite and increasing our sales organization from 20 to 70 people. We believe our fourth quarter results, which exceeded prior guidance, validate our strategy and initiatives," said Heath Clarke, Local Corporation chairman and CEO. “We are determined to build on our strengths and resources to become a leading provider of digital media solutions connecting consumers with local merchants. There were significant accomplishments in 2011 related to this objective.

      The financing completed at the start of 2011 allowed us to execute three strategic acquisitions and expand into new, high-growth local advertising segments. Our larger sales force allowed us to sell the many new ad products we launched in 2011 and we ended the year with more than 800 direct customers enrolled in our Exact Match digital media services. Revenue concentration from our two largest partners fell to 50% from 70% of revenue and non-search and direct revenues increased to a record $6.4 million, or 25% of total revenue, in the fourth quarter.

      Looking to the first quarter, we expect some seasonality, plus continued business investments, to result in flat revenues and a small Adjusted Net Loss, followed by a return to revenue growth and profitability on an Adjusted Net Income basis in the second quarter and through the remainder of 2012. Our outlook for 2012 is for about 40% revenue growth to $110 million and approximately $0.05 per share Adjusted Net Income,” concluded Clarke.

      • 2 Replies to flankenking
      • of Demandware and a market-cap of 800 million makes any sense, when you compare with the numbers of Local.com and the idiotic low market-cap of 800 million.

        "Based in Burlington, Mass., Demandware was founded in 2004. It now has 215 employees, up from 150 at the end of 2010 and 104 at the end of 2009.

        As of Jan. 1, the company says it had 101 clients and serviced 361 retail websites. At the end of 2010, it had 69 clients and serviced 215 websites.

        Client companies, which it also describes as subscribers, typically sign up for three-year subscription contracts, but customers ink contracts as short as one year or as long as seven years, the company says.

        Subscriptions accounted for 84% of Demandware's $56.5 million in sales in 2011, with the rest coming from one-time jobs. The year prior, subscriptions accounted for 78% of its $36.7 million total sales."

      • But the market-cap of Local.com was only 54 million yesterday.

    • Revenues of Demandware are only two third of Local.coms, but the market-cap of Local.com is only 58 million.

      The market-cap of Local.com must be be the same valuation 1,050 million or $48/share (yesterday $2.66/share).

      Great parts of growth of Demandware wasn't organic, an important reason for growth was buys of other companies.

 
DWRE
51.91-0.90(-1.70%)11:23 AMEDT

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