Salesforce.com may be forced to buy back shares following IPO

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Salesforce.com might have to repurchase the securities it intends to sell in an initial public offering if a recent interview by its chief executive is found to have violated US legislation.

In an amended prospectus filed with the US Securities and Exchange Commission (SEC), the organisations said it halted its IPO on 13 May to allow for a “cooling off” period, after Marc Benioff took part in an interview with the New York Times, which was published on the 9th of the month. The danger is that this and other publicity during the quiet period could be considered to be a jumping the gun violation, the company admitted.

It explained in a filing “While some of the factual statements about salesforce.com in the article are disclosed in the prospectus, the article presented statements about our company in isolation and did not disclose many of the related risks and uncertainties described in this prospectus”.

As a result, if it is found to be in violation of SEC rules, Salesforce.com said that it might be ordered over a period of a year to repurchase shares sold to purchasers during its IPO at the original purchase price.

The vendor indicated in April that it planned to sell 10 million shares at an estimated price of between $7.50 and $8.50 per share during the week of 24 May and had applied to list on the New York Stock Exchange under the symbol, CRM.

Meanwhile, applications vendor SSA Global Technologies hopes to raise as much as $200 million in a proposed IPO on the Nasdaq, according to a recent filing with the SEC. The firm has three per cent of the $21 billion market for applications software, according to AMR Research, after having acquired Baan’s ERP offerings and Computer Associates’ interBiz supply chain and financial packages.

Most of its revenues come from maintenance fees charged to its 13,000 customers, which are mainly medium sized organisations. SSA is majority owned by Cerberus Capital Management and General Atlantic Partners.

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