Demandware: The eCommerce Cloud IPO… Live Coverage (DWRE, SKYY)

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Demandware Inc. (NYSE: DWRE) has priced its initial public offering and the deal is a small one with only 5.5 million shares of common stock.  This is a premium IPO that priced at $16.00 per share against a recent price range of $12.50 to $14.50 per share.  All of the shares being sold in the offering are being sold by Demandware.  We are providing live coverage throughout the first trading day on this offering below.

Goldman Sachs and Deutsche Bank Securities were the joint book-running managers; William Blair & Company, Oppenheimer & Co., Canaccord Genuity Inc., and First Analysis Securities were the co-managers for the offering.  The underwriters have been granted a 30-day overallotment option to purchase up to an additional 825,000 shares of common stock from the company.

Demandware Commerce empowers retailers to create the most effective and tailored shopping experiences for consumers across all digital channels, including web, mobile and call center.

The company was founded in 2004 and it initially filed in mid-2011 to raise up to $100 million via a sale of stock to grow its online e-commerce platform. Affiliates of North Bridge Venture Partners and General Catalyst Partners each hold large stakes in Demandware. One ETF to watch today is the First Trust ISE Cloud Computing ETF (NASDAQ: SKYY) as it is a cloud-tech ETF.  While it does not yet include Demandware, it likely will soon.

UPDATE 9:40 AM EST: Shares are indicated to open in a range of $22 to $25… Go ahead and expect that the 825,000 greenshoe option will be exercised by the underwriters.

UPDATE 9:51 AM EST: Jim Cramer just said on CNBC, “I think people who pay up here are not likely to make money.”

UPDATE 9:56 AM EST: Demandware has opened for trading.  At 9:55 we have seen 1.2 million shares trading and the price is $25.40.

UPDATE 10:15 AM EST: shares are now down to $23.69 and over 3.5 million shares.

UPDATE 11:00 AM EST: Demandware has traded 4.4 million shares and shares are trading at $23.83.  Remember, at 5.5 million shares it is the entire float without considering that the 825,000 share overallotment option was exercised.

UPDATE 11:50 AM EST: We have now seen 4.78 million shares trade hands and the last print was at $24.01.  The volume is petering out already.

UPDATE 1:20 PM EST: Shares last traded at $24.73, still under the highs after the open and trading volume is 5.26 million shares.

UPDATE 2:30 PM EST:  Demandware trading volume is at 5.47 million shares so effectively the entire float has traded hands without the consideration of the greenshoe option of 825,000 shares.  On a side note, it does not feel normal at all to find a $24.00 stock which often has listed bid-ask spreads of $0.07 to $0.11 on official quote systems.