Amidst all of the the sturm und drang of l’affaire GameStop, Qualtrics went public today.
After pricing its stock above its raised IPO range, the company received a warm welcome from public investors. After starting its trading life worth $41.85, Qualtrics closed the day worth $45.50, up some 51.67%.
The software company’s debut comes after a lengthy path to the public markets; Qualtrics sold to SAP on the eve of its first run at a public listing back in 2018. Now, SAP has completed spinning the company out, though the software giant remains the Utah unicorn’s largest shareholder.
That Qualtrics’ IPO might perform well was presaged in its pricing run, having prices far above its initial valuation estimates; there was evidence of strong demand even before its shares started to trade.
But did Qualtrics misprice, given its strong first-day performance? TechCrunch spoke with Qualtrics CEO Zig Serafin, and its founder and current executive chairman Ryan Smith about its public offering, hoping to learn a bit about what is next for the company.
Pricing, plans
Having spoken to myriad folks on IPO days, I’ve learned the best way to kick off is to ask about emotions. Most CEOs and other execs are tied up in what they can (and cannot) say. And they are well-trained by communications experts regarding what to repeat and emphasize. You can sometimes loosen them up a little, however, by asking them how they feel.
In response to that question, Serafin described a feeling of gratitude and Smith brought up the long game. Qualtrics, he said, had been told that it couldn’t bootstrap, that it couldn’t build in Utah, that SAP had overpaid, that SAP had messed up and so forth.
The long game worked out, however. Qualtrics did bootstrap, did build in Utah and the SAP deal in hindsight appears quite cheap; Qualtrics is worth over $23 billion today, far above its previous $8 billion price tag.
TechCrunch asked about the Zoom-based roadshow that the company went on, a far cry from the traditional city-hopping tour. Smith said that investors still had their notes from its 2018 roadshow, allowing them to grade its performance. Qualtrics did everything that it said it was going to, he continued. Serafin noted that the market was better known this time around and that investors didn’t need what Qualtrics calls “experience management” explained to them.
Our read of the comment is that institutional money has spent time reading up on software, which makes sense given the recent IPO market for software concerns.
Smith largely deferred on TechCrunch’s questions regarding the company’s IPO pricing. Serafin said that he would stay focused on what the problems their customers face are, instead of what the stock market might do.
These are the comments you can make when your company prices well and trades higher; it’s easy to stay above the financial drama when things are going just fine.
As we wrapped, I joked that we could end the call as I had run through my questions and the pair weren’t going to say anything negative about SAP. Summarizing their response: How does SAP and its previous decision to buy the company appear now in the context of Qualtrics’ risen value? I thought that that was fair enough.
But as the call closed I did ask about the price that Silver Lake paid for a chunk of the company’s stock before its IPO, which in retrospect does look cheap. In response to TechCrunch’s comment that the investing giant had paid around half-price compared to Qualtrics’ end-of-day-one share price, Smith said that it hadn’t looked half-priced back when the deal was put together.
Then Smith noted that his favorite basketball team was leading the NBA. And your humble servant, a Warriors fan, lacked a useful rebuttal.
Qualtrics prices IPO at $30 per share, above its upgraded target range
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