DRAPER -- TenFold Corp. may not have a ".com" at the end of its name, but the Draper company's stock soared from the moment it started trading on the NASDAQ stock exchange Friday.
In its initial public offering, the producer of business software applications hit $24.50 per share in early trading, up 44 percent from the $17 pricing it received from lead underwriter Goldman Sachs Thursday. Goldman Sachs chose $17, which was at the upper end of the projected range, based on anticipation of strong demand for the 4.7 million shares offered, trading under the symbol TENF.Perot Systems Corp., the Dallas company owned by multi-millionaire and former presidential candidate Ross Perot, recently formed a strategic alliance with TenFold that will allow Perot to buy 1 million of those shares.
But Glen Mella, TenFold's senior vice president for marketing, said the IPO's success does not mean company employees are focused now on spending their newfound wealth. Instead, he said, they continue to work on building a good company for the long-term.
"All TenFold employees are owners of the company, and they all have stock options based on their responsibilities, positions and years with the company," Mella said. "They all have a direct financial interest in the valuation of our company over time, but again, I would reiterate that that's not really what they're focused on in the short-term. . . .
"If we wanted to go out and just do a high-flying IPO, we wouldn't be focused on profits, we wouldn't be focused on growing and training our people, we wouldn't be focused on opening (new) offices."
Mella said TenFold's recent history of making a profit differentiates it from some Internet companies that made big splashes with their IPOs. TenFold had net income of $1.6 million in the fourth quarter of 1998 and revenue of $40.2 million for all of last year.
"Not only have we grown dramatically, but we've also generated profits," Mella said. "A lot of people do IPOs when they're still promising future profits, so to speak."
He said TenFold is profitable now, and should continue to do well in the future, because it has some unique technology and procedures.
The company was founded in 1993 in San Francisco by Jeffrey L. Walker, a former executive of Oracle and founder of that company's applications division. TenFold relocated to Draper in 1996 to take advantage of Utah's "talented technical work force," Mella said, and Gary D. Kennedy, the former president of Oracle USA, became TenFold's president and chief ex- ecutive in September of that year.
After three years of developing its technology, the company started selling applications in 1997.
"We now have 13 offices in most of the major metro markets in the United States, as well as London," Mella said. "We have ramped up to between 350 and 400 people now in those multiple offices, and we have a fairly large and growing list of industry-leading customers in various market segments, such as insurance, financial services, health care, energy and telecommunications."
TenFold helps those companies by building and implementing large-scale, complex computer applications in a matter of months, instead of the years usually required for such tasks, he said. And it completes those projects in a unique way.
"We do that for a fixed price and on a fixed schedule, guaranteed," Mella said. "In fact, it's a money-back guarantee. Nobody in our (industry) offers that kind of value proposition."
He said TenFold can offer that guarantee because of its Universal Application technology and the TenFold Way, the company's disciplined methodology for designing, building and delivering applications.
David Hofferberth, senior analyst with the Aberdeen Group in Boston, said those unique aspects of the company have drawn significant interest in the industry and from investors.
"The stuff they've done never ceases to amaze me," Hofferberth said Thursday. "They just kind of push the envelope in terms of time to develop, and the TenFold guarantee. . . . They're an aggressive company, and they do deliver what they promise."
Hofferberth said he thinks TenFold has a good chance of finding success in the long-term, but the company will face competition.
"You can see TenFold being that type of firm that people look to as kind of pointing the way in terms of the future, the way things are going to be done," he said.
Mella said the company is counting on the IPO to help it gain even more recognition and put it more firmly on the path toward that future.
"When you're selling to Fortune 1000 companies around the world, and you're inviting them to make a multi-million dollar investment with you, it's a more challenging thing to do when you're a privately held company with little recognition," he said. "When you have publicly traded stock, you appear on the radar screens of a lot more people.
"The IPO brings us more recognition and visibility. We're not doing it because we're running out of money or need to raise capital."
Mella said the company is not prepared to say specifically how it will use the money it raises through its IPO, but it could be used to grow the business or for acquisitions.
For now, he said he expects most TenFold employees to keep working hard . . . and hold on to their stock.
"None of the leaders, and probably few of the employees, of TenFold are really that interested in the short-term aspect of what it means to go public . . . ," he said. "We're not really in the business of trying to decide what (the stock) is going to do this year, what it's going to do next week. As employees, very few of us, if any, are planning to sell stock."