As many are now aware, my Pre-IPO Anxiety was all for naught as the pricing committee meeting unfolded smoothly. Investor demand was strong enough to be oversubscribed by a multiple of the number of shares available to sell in the offering.
We nonetheless elected to price at $16 per share, which was the middle of our published range set at the beginning of the roadshow.
Among the factors considered was the flop of the King Digital IPO which happened the very day I met with our pricing committee to fix TriNet’s share price for those investors we selected to give allocations to from the roadshow.
King Digital’s pricing committee fixed at $22.50 just the prior night, then fell in trading on their IPO to close out at $19.
Having a large tech IPO lose 16% off their targeted pricing caused a flurry of industry pundits to dredge up the Facebook debacle and speculate if the IPO window was starting to slam shut.
With our pricing now set, I could actually breathe that long sigh of relief and realize that in the next 12 or so hours TriNet would in fact be a public company with a market capitalization likely to be more than $1 billion.
Later that evening I got a peek at the giant TriNet banner unfurled across the entire front of the New York Stock Exchange – a sight that couldn’t help but take me back to how real this all was.
Early Thursday morning our group of about 50 TriNet people (which included colleagues from many of TriNet’s offices) ushered in to the NYSE building as we gathered in the storied Board of Directors room. With the size, fixtures and elegance befitting an ornate ballroom, I couldn’t help but reflect on some of the company and financial market history that took place in this very setting over the last 110 years.
Following a classy breakfast and welcoming remarks, we toured the trading floor, all the while marveling at TriNet’s logo and tag line appearing on huge monitors, signs and banners. You simply couldn’t look anywhere across the vast trading floor and not see something with TriNet on it.
A smaller group of us went up to the balcony overlooking the trading floor and just before opening bell began a hearty round of applause signaling our celebration was about to begin. TriNet CEO Burton Goldfield then pushed the button and the loud clanging of the opening bell signaled start of the trading day and TriNet’s official debut as a public company!
Standing on that balcony, applauding and surveying the trading floor, the cheering TriNet team and key supporters was absolutely a moment so incredible it felt surreal. Watching the opening bell video clip brings that feeling back – something I’m sure to do a few more times.
The trading itself unfolded in exactly the way you would want to execute an IPO. Our opening trade was at $18.50 – garnering an immediate 15% pop for the investors we allocated shares to the prior evening.
We closed that first day at $19.31 – pushing us over the 20% mark for gains on opening day. Importantly, we also attracted the core group of investors we sought. These are the large fund managers who showed the best understanding of our business, were tuned in to our growth drivers and we believe are likely to remain long term shareholders – critical to our entry to the public market.
IPOs Happen When You Have the Right People
Kudos to my successor Burton Goldfield who has accomplished so much in scaling the business over his tenure and has now executed a textbook IPO.
His selling to large portfolio managers has some differences to the dynamic of earlier stage entrepreneurs pitching VCs. But no matter what the business fundamentals look like, these sophisticated investors place a huge amount of weight on their personal assessment of the CEO – seeking to validate whether this person has what it takes to step up into the new demands of being a public company and continue a growth trajectory that can increase the public stock price over time.
Our initial trading results shows how well the market embraced Burton’s leadership and vision. My favorite video clip comes from Jim Cramer’s Mad Money segment – we simply couldn’t have scripted a better dialogue as Burton and Jim covered TriNet investor highlights on national television for CNBC.
Even though the leader deserves every credit for being the public spokesperson, in all of our IPO events that day Burton was quick to acknowledge his good fortune to be surrounded by a talented group of colleagues who make TriNet what it is today. And just as important, the IPO is only another step in the long term growth of the company.
Our IPO is a big step for sure, and one that I remain giddy with excitement about. Glad to be part of this ongoing journey as there is so much more yet to come.