CyberArk Software Inc.(Nasdaq:CYBR), which specializes in protection of organizational information within an organization itself, not from outside, has submitted a draft prospectus to the US Securities and Exchange Commission (SEC) for a $200 million offer for sale. No new capital will be raised for the company in this secondary offering; CyberArk already has enough liquidity, and it is also possible that the shareholders do not want to dilute their holdings beyond the offer for sale.
CyberArk's information protection is conducted through the management and monitoring of privileged accounts with a high level of authorization allowing access to very sensitive information in order to prevent such information from leaking to someone outside the organization. The underwriters for the offering will be among the leading investment banks in the US capital market, indicating that CyberArk has become a hot item on Wall Street: Goldman Sachs, Deutsche Bank, Barclays, and Bank of America-Merrill Lynch (chief underwriters); and William Blair, Nomura, and Oppenheimer (secondary underwriters).
Expected by the market
The timing of CyberArk's offer for sales was not designed as a surprise. Wall Street's unwritten law states that when a share reaches a peak, you sell it as quickly as possible. That is how it has always been in the world's largest stock market, and that is how it will always be.
CyberArk, whose shares were first floated at $16 a share, fairly quickly reached skyrocketed to the rarified height of $70.35 (reflected a $2.1 billion market cap), and its current share price is $59.27 (a $1.8 billion market cap). Both of these prices reflect a three-digit profit multiple.
The sell-off that following the share's peak of only a week ago was apparently the result of a market assessment that some offer for sale was in the offing in the company's immediate future. Even after that, however, the current share price reflects a fantastic 270% return for anyone who bet on it last September. The timing should come as no surprise when the fact that one of the major shareholders in the company is investment bank Goldman Sachs. It is no wonder that Goldman Sachs is pushing the company towards an offer for sale at the first possible moment.
Beyond the expected offer for sale, the expiry of the options vesting period means that CyberArk employees can sell immediately exercisable options. A past check by "Globes" found that the company's employees' options reflect an aggregate benefit of $275.6 million on paper, of which $182.5 million in immediately exercisable. CyberArk CEO Udi Mokady's holdings are worth a gross NIS 250 million. The selling off of the share since its peak of one week ago resulted from the market's belief that an large-scale offer for sale was imminent.
Published by Globes [online], Israel business news - www.globes-online.com - on March 1, 2015
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