Guidewire Insiders Hit The Sell Button (GWRE)

Guidewire Software, Inc. (NYSE: GWRE) has been a powerful IPO and now insiders are unloading stock.  The company filed this Monday to offer 750,000 shares of common stock which are being sold by the company, but another 6,750,000 shares of common stock will be sold by existing shareholders looking to lock in their gains.  This company sells software services with a focus on the property and casualty insurance sector.

Investors should be advised that at the start of April the company filed to sell up to $225 million in shares, so this amended filing is bringing those terms closer to fruition.

The selling holders granted the underwriters an option to purchase up to 1,125,000 additional shares of common stock to cover over-allotments.  Guidewire will not receive any of the proceeds from the sale of the shares of common stock being sold by existing holders.

Guidewire has a rather large underwriting group with book-runners listed as J.P. Morgan, Deutsche Bank Securities, and Citigroup.  Other underwriters are listed as UBS Investment Bank, Stifel Nicolaus Weisel, and Pacific Crest Securities.

What matters here is that the sale is coming after a monumental run and this has been one of the best performing IPOs this year.  Shares rose to more than $17 on the first day after selling 8.85 million shares at $13.00 at a price which was above the $10 to $12 expected price range.

We are not seeing much impact on the stock as shares are up 0.7% at $28.17 right after the open.  The post-IPO trading range has been $16.45 to $38.13.

Update at 9:45 AM EST: Guidewire shares are down 1.1% at $27.67 but trading volume is still rather thin.

JON C. OGG