PROVO — Homegrown Utah tech giant Qualtrics rang the bell from its Provo office and officially went public Thursday with an offering exceeding expectations — even as its initial public offering price steadily rose ahead of the anticipated date.
COVID-19 precautions prevented the company from traveling to New York for the big day, so they brought the stock exchange here and went public from their headquarters in another first for the Beehive State.
"We rang the bell and opened up and took a company public from Utah," co-founder and executive chairman Ryan Smith told KSL.com. "We had Nasdaq here and we literally opened up the stock exchange this morning by taking a company public from here."
Qualtrics sold nearly 51.7 million shares of Class A common stock at $30 per share, raising about $1.55 billion in the IPO, according to a filing with the Securities and Exchange Commission. It had previously aimed to sell 50.4 million shares at $27-29 per share. The company's stock opened at about $41 Thursday afternoon on Nasdaq under the ticker XM, named after its Experience Management software. By closing Thursday, the stock price was hovering around $44.
"We didn't pick Q or some derivation of our name — we picked XM as our ticker symbol, and that's because customers are seeing the Experience Management category, and the technology that we built, to play the biggest role in determining which companies will succeed or fail in the future," CEO Zig Serafin said. "What the market is telling us is that Experience Management is going to be as essential to the way that businesses operate as HR systems and CRM systems."
Thursday's offering shattered Utah's record for the highest IPO, previously held by Salt Lake City-based Energy Solutions which raised $690 million in 2007.
"This is just another big milestone for the company too," said Serafin. "It's a great IPO, but it's another milestone that just continues to build the growth of the company — and in a very exciting market and experience management."
Qualtrics' initial IPO filing estimated it would sell 49.2 million shares at a price range of $22 to $26, but the company later upped its offering to 50.4 million shares at a range of $27 to $29. On Thursday, Qualtrics amended its filing with the SEC to address comments made by the CEO of its parent company German software company SAP that could possibly violate the commission's regulations.
SAP CEO Christian Klein, who sits on Qualtrics' board of directors, told CNBC this week the IPO was "massively oversubscribed," which could appear as promoting the stock, a violation of the SEC's quiet period that prohibits promotional publicity ahead of going public. The updated filing addressed Klein's remarks and said Qualtrics had no prior knowledge of his statement until the segment aired. It also noted potential investors "should not consider the statements in the interviews as set forth below in making your investment decision."
Qualtrics joins other Silicon Slopes companies in going public in recent years; American Fork-based tech company Domo went public in June 2018 with an offering of $193 million, and Draper-based Pluralsight went public the same year with a more than $350 million offering.
Qualtrics was poised to go public that year but was acquired by SAP weeks before its debut.
How it started. How it's going. pic.twitter.com/5BzJdYFokD— Ryan Smith (@RyanQualtrics) January 28, 2021
Thursday's IPO came as the stock market experienced unprecedented conditions as Reddit users pushed stocks like GameStop and AMC Entertainment to double in a move that forced short-sellers to face losing bets.
The Dow Jones Industrial Average fell 633.87 points, or 2.05%, to 30,303.17; the S&P 500 lost 98.85 points, or 2.57%, to 3,750.77; and the Nasdaq composite dropped 355.47 points, or 2.61%, to 13,270.60, Reuters reported on Wednesday.
The stock market volatility didn't impact Qualtrics' IPO, and Serafin said keeping a customer-focused mindset is what's most important to them.
"Everything that we do is with a long-term perspective. And more than anything, we're spending our time on how we're building this business, how we're serving that customer – that's our focus. Our job is not to try to predict the market; our job is to go serve our customers," he said.
The company was founded in Provo in 2002 and was initially conceived as an online survey and questionnaire tool for anyone to conduct market research. Now, it's evolved into an analytical platform that helps businesses assess performance with clients and employees.
"There's a track record here that speaks for itself. People that have been looking at that and what's happened — not only over the last two years where we've continued to show durable growth but looking back at the last 10 years of this company," Serafin said. "There's a leadership team in the culture. There's a mindset of serving customers and enabling people to solve some of the hardest challenges in the way that they're operating their businesses and be able to be leaders based on experience in their respective industries."
Smith recently purchased the NBA's Utah Jazz and Vivint Arena from the Larry H. Miller Group of Companies. He is the largest individual shareholder of Qualtrics. With Thursday's news, the company has once again brought the national spotlight to Utah's growing tech-driven industry.
"Utah is in hyper-growth mode, it truly is. People are realizing, 'Hey, there's nothing you can't do here.' We're not a small market anymore," Smith said.