NetSuite's decision to hold an auction-style initial public offering later
this month will probably pay off, one analyst judged on Friday.

"I expect a very good amount of demand and I do expect it to price above
$16. The only caveat is, the [IPO] market is quite poor right now," said
Scott Sweet, managing director of IPOBoutique.com.

The hosted business software vendor plans to sell 6.2 million shares of common
stock for an expected US$13 to $16 each through the auction, which would raise
a maximum of $99.2 million. The
Wall Street Journal has reported that the auction will take place Dec. 21.
A NetSuite spokeswoman could not immediately be reached Friday to confirm that
date.

NetSuite's stock will be traded on the New York Stock Exchange under the single-letter
symbol "N."

The company, which targets small- to midsized businesses, is following the
lead of Google in conducting an online, auction-style IPO, which is meant to
attract a wide range of investor types.

Under the auction's rules, individuals who have an account with Credit Suisse
Securities, W.R. Hambrecht & Co. or ETrade Securities can submit bids, according
to the SEC filing regarding the plan.

NetSuite posted a net loss of $35.7 million in 2006, and in 2007 has so far
lost $20.6 million for the nine months ended Sept. 30. Also, its accumulated
deficit stood at $241.6 million as of Sept. 30, NetSuite said.

However, its revenue is on a general upswing, growing from $17.7 million in
2004 to $67.2 million in 2006. That trend continued this year, as the company
took in $76.8 million for the nine-month period ended Sept. 30. NetSuite said
it had 5,400 customers as of that date.

"Bottom line, their losses are coming down, but they still need some work,"
Sweet said. "If their losses were going up, that would probably turn off
many technology investors."

He also remarked on NetSuite's decision to hold the auction so close to Christmas:
"Talk about pushing it. It's getting real close."

NetSuite said it plans to use the proceeds to pay off an $8 million balance
on a line of credit with Tako Ventures, LLC, an entity controlled by Oracle
CEO Larry Ellison, a major investor in NetSuite.

"We may also use a portion of the proceeds from the offering to acquire
other businesses, products or technologies. We do not, however, have agreements
or commitments for any specific acquisitions at this time," the statement
added.

The IPO stands to further enrich Ellison, who controls about 60 percent of
NetSuite's outstanding stock, or some 31.9 million shares. He is planning to
move those shares into a "lockbox" limited-liability company, in order
to "effectively eliminate" his voting control and to avoid potential
conflicts of interest, NetSuite said in the filing.

IDG News Service

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