Stock Watch: Strong Start for Sequoia Software

Sequoia Software Corp. (Nasdaq: SQSW) gained 2 1/16 to close at 10 1/16 Friday, its first day of trading.

The 26 percent price gain was “impressive,” said Jeff Hirschkorn, senior analyst at IPO.com. “I think it’s a starting point” for other IPOs to come to market, he said.

The Columbia, Maryland-based maker of software to speed e-commerce and other Internet transactions sold 4.2 million shares at $8 apiece, after cutting the price range from $11 to $13 as market conditions for Internet IPOs turned hostile.

“Similar to a recent pattern of deals, they did cut the rates,” offering the stock at the low end of an already-lowered price range, said Hirschkorn. “You have to cut the [price] to really make it attractive,” he added. While companies cannot expect to see 200 percent gains, he said, those with good offerings should be able to do well. “There’s a resurgence of companies filing,” said Hirschkorn. “Everybody’s banking on the future.”

Sequoia, which builds its product around the XML language, had sales of $8.4 million and a loss of $12.8 million in 1999. Blue Cross/Blue Shield of Minnesota is the company’s largest customer, accounting for some 24 percent of sales.

Lehman Brothers, Inc. led the offering, with SG Cowen, Wit SoundView and Fidelity Capital Markets as co-underwriters.

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