What is shaping up to be one of the biggest IPO weeks in years is off to a strong start.
Jive provides a social platform for businesses. Unlike consumer-facing social networks including Facebook and LinkedIn
If this seems like it would be an easy feat for any tech company worth its salt to develop in-house, think again. Some of Jive's 657 customers include Hewlett-Packard
Thankfully, Jive is growing quickly. It has posted revenue of $16.9 million, $30 million, and $46.3 million over the past three years, respectively. The top-line success isn't working its way down to the bottom line. Jive hasn't been profitable in the past, and it expects losses to continue in the foreseeable future.
Some may also fear that Jive's solution is built on open source, but we can't discredit that as a model. Look at Red Hat
The platform's simplicity is also something that can't be knocked. We've seen LivePerson
This doesn't mean that Jive is cheap. Its IPO priced the offering at roughly $700 million, and its buoyant opening this morning pushed the stock up to nearly $900 million. The glitz of social networking makes this a compelling story stock, but the small revenue numbers and lack of profitability may keep gains in check.
However, this doesn't mean that investors should bet against the company. Jive hits the market with crosshairs on its neck hairs -- and that's a good thing. Jive is a compelling acquisition target for a larger enterprise software company hoping to spice up its ho-hum organic growth.
If buyout chatter does get started, I'd recommend Jive's own platform to keep it between friends.
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Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story, except for HP. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.