Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Jive IPO Filing Holds Clues to Valuation Mystery

Jive Software, the pre-IPO player in the red-hot social enterprise and collaboration business, amended its S-1 filing with the U.S. Securities and Exchange Commission last night. Among the new revelations are the exchange it has selected for its debut — the Nasdaq — and its four-letter ticker symbol. Think you can guess it? That’s right: JIVE.

The amendment also includes some new financial data. For the quarter ended Sept. 30, Jive reported a $7.6 million loss — which is in line with the year-ago quarter — on sales of $20.8 million; a 69 percent increase year on year. And for the first nine months of the year, its net loss, at $38.1 million, was 83 percent higher than a year ago; sales, at $54.8 million, were up 74 percent from a year ago.

Jive also disclosed how much it paid for OffiSync, the company it acquired in May — the acquisition allows Jive to make more socially aware applications for Microsoft Office. Jive paid $23.3 million for OffiSync, which included the issuance of 78,110 shares of stock worth $600,000, implying at the time that each share of Jive was worth about $7.68. This gives us a clue concerning the paper value of the shares of the company at the time of that deal.

Jive’s two main VC investors own more than half the company: Sequoia Capital owns 36.2 percent, while Kleiner Perkins owns 14.2 percent. Assuming that the $7.68 share price implied by the OffiSync acquisition still holds — which it probably won’t by the time the offering prices — Sequoia’s 16,975,233 shares would be worth $130.4 million, while Kleiner’s would be worth $51 million and change. CTO and co-founder Matt Tucker has a stake that would have been worth more than $54 million at the time of the OffiSync deal. Tony Zingale, the former head of Mercury Interactive, who helmed its sale to Hewlett-Packard and who was brought in to take Jive public, has a stake that would have been worth about $27 million at the time of the OffiSync deal. Again, take those valuations with a grain of salt, because they’re likely out of date by now.

Update: It turns out that, yes, that valuation from May is out of date. In September, Sequoia and Kleiner exercised warrants to buy shares, at $10.37 a share. So that would push Sequoia’s stake to north of $176 million, Kleiner’s to $69 million, Tucker’s to $73 million and Zingale’s to $37 million.

Elsewhere in the filing, we learn that Jive finished the quarter with $72.6 million in cash, and has whittled its long-term debt down to $26 million, down from the $33 million it listed in its initial S-1 filing in August. Much of that debt was taken on to get acquisitions like the OffiSync deal done.

Interestingly, the filing also contains a glance at OffiSync’s books, and it was clearly a tiny company just getting started. Through the middle of May, when the acquisition was concluded, it had booked $205,000 in sales. Assuming a constant run rate, it would have finished the year with about $600,000, meaning Jive paid about 39 times sales. A fair metric? It is, if Jive considered OffiSync’s capabilities a strategic feature, which it clearly did.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik