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Benefitfocus Shares Soar 100 Percent on First Day of Trading

By  +Follow September 18, 2013 1:01PM
Tickers Mentioned:

Benefitfocus, Inc. ($BNFT), a provider of cloud-based benefits software solutions for consumers, employers, insurance carriers and brokers, rang the opening bell at Nasdaq Wednesday, which seemed more like a shot signaling for the stock to start sprinting straight ahead on its first day of trading. 

As Equities.com analyst Francis Gaskins noted in his IPO report on Benefitfocus, the company is a subsidiary of The Goldman Sachs Group (GS) , which holds 66-percent of pre-IPO shares, making it likely that the company would promote it to its clients.  Gaskins also noted “…the IPO market likes cloud-based software companies with a subscription-based revenue stream,” even though Benefitfocus has yet to deliver up to expectations.

In the six months ended June 30, revenue at Benefitfocus climbed to $48.2 million, up about 25 percent from the year prior quarter.  Net loss was $16.0 million for the quarter.

In addition to the IPO hype and the run to new highs on Wall Street with the Federal Reserve opting to hold off on tapering for the moment, it also seems that Benefitfocus got a lift from Walgreen Co. (WAG) announcing today that it is going to provide its more than 160,000 eligible employees with employer-sponsored health insurance coverage in 2014.  Time Warner Inc. (TWC) and International Business Machines Corp. (IBM) have recently announced similar plans to move employees to private health exchanges, decisions that fall right into the wheelhouse of Benefitfocus.

There’s been plenty of debate about the rise of private health exchanges that are cropping up all over the country in response to Obamacare, which will provide subsidies to low- and middle-income Americans to help pay healthcare costs starting in 2014.  Some employers are shying away from public markets (which is where anyone receiving a subsidy will go) and setting up private insurance plans. 

Benefitfocus, which offers software to manage those types of benefit plans, is betting that more large companies will continue to go the private exchange route.  The company says there are about 18,000 large companies (more than 1,000 employees) in the U.S. that are potential clients.  Right now, Benefitfocus has about 350 of those companies in its portfolio.

4.935 million shares were priced at $26.50, $2.00 more than the high end of the expected range.  Those original prices were left in a cloud of dust with the stock printing $42.50 at the opening bell.  Shares rose as high as $55.87 before closing the first day at $53.55 for gains of 102 percent from the IPO price.

Goldman, Sachs & Co., Deutsche Bank Securities Inc. and Jefferies LLC acted as the book-running managers for the offering with Canaccord Genuity Inc., Piper Jaffray & Co. and Raymond James & Associates, Inc. serving as co-managers.  The underwriters were a granted 30-day option to purchase up to 740,250 shares of BNFT stock at the IPO price.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.

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Results for bnft
1 Sep 14 15:55:58
$IWEB closed up 100% today, on more than 290 MILLION shares traded! Huge News: http://t.co/ucQcnpafDY $XTXI $BNFT $DDC
1 Sep 14 13:15:15
$BNFT | Benefitfocus, Inc is down 16% since we reported $104,679,570 of insider selling on 07/24/2014. Did you ... - http://t.co/ZIw0GZkDmu
29 Aug 14 12:12:46
RSII shot up over 100% today! Major Update: http://t.co/GMnQioznZp $XTXI $BNFT $DDC
29 Aug 14 11:31:21
$BNFT | Benefitfocus, Inc is down 15% since we reported $104,679,570 of insider selling on 07/24/2014. Did you ... - http://t.co/11b9is1JCD
Market News
28 Aug 14 17:07:49
$BNFT: ALCO Stores, Inc. Selects Benefitfocus HR InTouch Marketplace http://t.co/efZE3onS4s http://t.co/55W1Oc411j
28 Aug 14 16:32:07
$VIIC ran up 720% Today in an explosive move! Our new picks are coming soon: http://t.co/EdxLh9u5Nx $XTXI $BNFT $DDC
john smith
28 Aug 14 14:28:08
$BNFT - Amended Statement of Changes in Beneficial Ownership (4/a) http://t.co/ztOkwLleKf
john smith
28 Aug 14 14:25:05
$BNFT - Amended Statement of Beneficial Ownership (3/a) http://t.co/IkboOVpPcG
28 Aug 14 13:06:18
$VIIC ran up 720% Today in an explosive move! Our new picks are coming soon: http://t.co/86hsEuqG18 $XTXI $BNFT $DDC
28 Aug 14 12:49:39
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Stock Headlines
28 Aug 14 10:07:59
$BNFT: Benefitfocus Inc.: Benefitfocus Announces Board of Directors Changes http://t.co/poCyi9Afk8 http://t.co/DEmbcP4vae
Daily Contracts
28 Aug 14 09:28:01
Real-Time feed of company contracts, original agreements and executive updates from Benefitfocus $BNFT http://t.co/cFJ3mTdh5P
27 Aug 14 20:19:32
REVI closed up 44.5% today! Special Update: http://t.co/6o15AzsDr3 $XTXI $BNFT $DDC
27 Aug 14 08:09:49
$BNFT: Benefitfocus announced that Ray August has joined the company as COO http://t.co/IZsyPv8S5w
john smith
27 Aug 14 06:06:06
$BNFT - Benefitfocus Announces Expansion of Senior Executive Team http://t.co/E9Oq28PrBt
27 Aug 14 00:51:02
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Business Updates
26 Aug 14 15:07:51
$BNFT: Benefitfocus CTO Sells $172440 in Stock (BNFT) http://t.co/aAnlWn3TjF http://t.co/TTHRX16oIK
john smith
26 Aug 14 14:13:33
$BNFT - Statement of Changes in Beneficial Ownership (4) http://t.co/ml6uwzd2MO
26 Aug 14 09:19:21
$BNFT | Benefitfocus, Inc is down 15% since we reported $104,679,570 of insider selling on 07/24/2014. Did you ... - http://t.co/GiLb0SRHeC
26 Aug 14 01:22:52
$MCET closed up 57% yesterday. Platinum Members once saw 235% gains on it, in 1 week: https://t.co/ggXzafSnCL $XTXI $BNFT $DDC
By  +Follow September 18, 2013 1:01PM



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