BMC Software was founded in 1980 by John J. Moores, a former Shell (SHEL +0.74%) programmer who built the Houston-based company up to the point where he was able to acquire Major League Baseball's San Diego Padres. The business has turned into a stalwart that competes with some of the largest information technology service management (ITSM) and consulting companies on the planet.
The company was taken private after stakeholders complained that its management had been too slow to move into cloud computing. Since then, however, it's developed a number of products designed to ease automation, development, workflow, artificial intelligence, and security applications for more than 10,000 clients, including 86% of the Forbes Global 50.
This article will cover how to invest in BMC, the status of an IPO, and some alternatives to consider.
Is BMC Software publicly traded?
It's not. BMC was publicly traded until 2013, when it was taken private because of stakeholder concerns about its lack of progress in adapting to cloud-based computing. The company has filed paperwork with the Securities and Exchange Commission (SEC) to go public but changed course in October 2024, splitting it into two: BMC Helix, with a focus on monitoring and management software tools, and BMC Software, which will concentrate on software automation tools and mainframe computers.
At the time, the company described the split as part of an effort to take advantage of a rosy economic outlook and said in early 2025 that it would seek $2 billion for the sale of BMC Helix. CEO Ayman Sayed also didn't rule out the possibility of an IPO for BMC Software.
How to buy BMC Software stock
Because BMC Software is owned by private equity firm KKR, you can't buy its stock directly. Accredited investors, often high-net-worth individuals, may be able to purchase pre-IPO shares on platforms such as Equity Bee and Forge Global.
Accredited Investor
People who want to buy one of these alternatives to BMC Software can purchase shares in any brokerage account. Here's a step-by-step guide to investing in these stocks.
1. Open your brokerage app: Log in to your brokerage account where you handle your investments.
2. Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
3. Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
4. Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
5. Submit your order: Confirm the details and submit your buy order.
6. Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Dollar-Cost Averaging
Is BMC Software profitable?
As a privately held company, BMC isn't required to disclose much in the way of financial information. The company, however, said its revenue reached $2.3 billion -- smaller than ServiceNow's $10.98 billion but a respectable amount.
It's worth noting that KKR bought the company for $8.3 billion. When the investment firm notified the SEC of its plan to offer shares of the company in 2024, it estimated its market valuation at $14 billion to $15 billion. So, it's probably safe to assume that BMC isn't exactly struggling to stay afloat.
Should I invest in BMC Software?
Since BMC Software isn't a publicly traded company yet, its shares aren't for sale. This isn't necessarily a bad thing since it gives investors time to research the company thoroughly while they await its IPO.
The research process might excite you even more about the company's prospects and increase your conviction that it's an appealing stock to buy. However, you could also discover things about the company that change your mind about buying its shares.
Here are some reasons you might want to invest in BMC:
- You believe cloud computing will continue to soar.
- You think BMC will be a strong growth stock.
- You believe BMC can compete with applications being developed by top AI companies.
- You think businesses will continue to use the company's platform-as-a-service.
- You believe companies will need more of the services offered by BMC as information technology systems become more complex.
Of course, there are some reasons you might think this isn't the best investment for your portfolio:
- You worry that BMC will be overwhelmed by larger, more profitable operations.
- You're uncertain about the growth prospects of cloud computing and AI.
- You think the information systems technology management (ISTM) field is already too crowded with larger competitors.
- You believe the last decade -- with two takeovers and a scrapped IPO-- bodes ill for its future.
- You'd prefer to invest in an information technology stock with a lengthier track record.
ETFs with exposure to BMC Software
Since they're not publicly traded, BMC isn't held by any exchange-traded funds (ETFs). So, you can't get passive exposure to them. However, plenty of ETFs focus on information technology. Here are three top funds you might consider:
Exchange-Traded Fund (ETF)
Related investing topics
The bottom line on BMC Software
The course of IPO stocks is notoriously hard to predict. Although BMC Software has a lengthy track record of innovation and strong performance in a very competitive sector, it faces a number of competitors in the information technology, consulting, AI, and cloud computing areas, and its optimism in splitting the company in 2024 to take advantage of an improving economy in 2025 may have been misplaced.
If you invest in a new stock, especially a tech-related business, be ready for volatility. Do your research, make sure it fits into a diversified portfolio, and never buy shares in a company you’re not prepared to hold long-term.
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