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Workday (WDAY) Shares Spike After Pricing IPO Above Increased Range

 October 12, 2012 01:43 PM

(By Balachander) Workday Inc. (NYSE:WDAY) shares spiked as much as 76 percent on the first day of trading after the provider of cloud-computing software for management of human resources priced its initial public offering above an increased range.

Workday's debut comes after strong performances by others in the IPO market this week.

The Pleasanton, California-based company raised $637 million via an offering of 22.75 million Class A shares at $28.00 apiece.

The IPO values the company, founded by ex-PeopleSoft executives David Duffield and Aneel Bhusri, at almost $4.5 billion.

Workday, which has reported a full-year loss since 2007, had raised its estimated pricing range to $24 to $26 from $21 to $24 in its earlier regulatory filing.

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For the six months ending July 31, the company recorded a net loss of $47.3 million on revenue of $119.5 million.

Workday's public offering is the largest in the technology sector in 2012 besides Facebook Inc. (NASDAQ:FB), according to a Reuters report.

Workday was founded in 2005, and it employs more than 1,500 people. Workday serves more than 340 customers including Aviva International Holdings, AIG Inc. (NYSE:AIG), Flextronics International (NASDAQ:FLEX), Four Seasons Hotels, Lenovo, and Kimberly-Clark Corp. (NYSE:KMB), among others.

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On Thursday, Shutterstock Inc. (NYSE:SSTK), a digital imagery company, priced its initial public offering (IPO) of 4.50 million shares at $17.00 each, well above the expected range amid strong demand. Realogy Holdings Corp. (NYSE:RLGY), a provider of real estate services, raised $1.1 billion in its initial public offering after pricing the shares at the high end of its planned range. Shares of both the companies surged nearly 27 percent on the first day of trading.

Last week, Dave & Buster's Entertainment, a dining and entertainment company, withdrew its offering this week due to a volatile market.

Morgan Stanley & Co. LLC (MS) and Goldman Sachs & Co. (GS) are acting as lead joint book-running managers for the offering by WDAY.

Shares opened trading at $48.05 and reached as high as $49.21 on Friday.

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