ExactTarget Shares Jump 32% on IPO

ExactTarget successfully wooed Wall Street Thursday with an initial stock offering that saw investors bid up the share price – 32% on day one.

The Indianapolis e-mail marketing company went public at a price ($19) that was about 18 percent higher than expected, then watched as it kept climbing to a close of $25.11 — on the New York Stock Exchange.

“There’s a lot of demand and the IPO has been well received. The reception and interest in our company have been incredibly warm,” said Chief Executive Scott Dorsey.

Dorsey, who founded the software company in 2000, rang the opening bell on the exchange, where traders wore orange jackets in honor of ExactTarget’s brand color.
“It was surreal – to think about how hard we worked the past 11 years. I’m still floating about two feet off the ground,” Dorsey said about three hours after the stock with the easy-to-remember ticker of ET made its trading debut.

About two dozen ExactTarget officers and other employees made the trek to Wall Street with Dorsey, while others in the headquarters on Monument Circle watched the proceedings on a live video feed projected inside Hilbert Circle Theatre.

Earlier this month, Dorsey and two other executives at the company talked up the IPO to investors and others in a two-week road show that took them to many major U.S. cities. The company put off an earlier plan to go public in 2009.

The 8.5-million-share IPO raised about $161 million, which ExactTarget plans to use for general purposes. Most of its 1,133 employees are in Indianapolis.

The company, which sells software that allows companies to communicate with their customer through e-mail, mobile devices, social media and Web sites, lost $35 million last year on sales of $207 million, according to its stock prospectus.

ExactTarget has benefited from a trend that sees consumers increasingly using email, social media and other nontraditional means to interact with companies and their brands. ExactTarget’s customers include Microsoft, OneAmerica Financial Partners, Groupon, CareerBuilder and WellPoint.

After the offering, the company said that about 44 percent of its stock would be held by three venture companies – Battery Ventures, Scale Venture Partners and Technology Crossover Ventures. Each has a representative on ExactTarget’s board.
ExactTarget joins several other marketing software companies that have recently gone public or filed to do so. They include Bazaarvoice Inc., Reponsys Inc. and Eloqua Ltd.

ExactTarget becomes the second Indianapolis company in the past week to go public. Allison Transmission Holdings, which has a factory in Speedway, sold $600 million in stock last week.