Best U.S. Software IPO This Year to Face Wall Street Scrutiny

(Bloomberg) -- Wall Street analysts are poised to reveal their opinions on DocuSign Inc., the year’s best-performing IPO by a U.S. software company.

On May 22, a quiet period expires for perhaps the most amicable analysts on Wall Street: those working at banks that underwrote DocuSign’s IPO. The expiration will probably prompt initiations from Morgan Stanley, JPMorgan Chase & Co., Deutsche Bank AG, Citigroup Inc., Bank of America Corp., William Blair, Piper Jaffray Cos. and JMP Group LLC.

Shares in the electronic signature software maker have risen about 52 percent from their $29 initial public offering price last month. More than half of those gains occurred during DocuSign’s first day as a public company on April 27, when the stock jumped 37 percent from its listing price.

This will be the first chance for Wall Street to publicly evaluate the success of DocuSign’s expansion efforts, both in the U.S. and overseas. Proceeds from the IPO were earmarked to continue heavy investments in sales and marketing, Chief Executive Officer Dan Springer told Bloomberg after the listing. If Wall Street likes what it sees, the analysts may advocate for even more upside to the soaring stock price.

A more cautious take from analysts could cause shares to pare their run-up. Short interest represents about 3.2 percent of the stock’s free float, the highest level since DocuSign’s listing, according to Markit Securities Finance data. Shares are falling for their fourth consecutive day today, down as much as 2.3 percent.

--With assistance from Alex Barinka.

To contact the reporter on this story: Drew Singer in New York at dsinger28@bloomberg.net

To contact the editors responsible for this story: Courtney Dentch at cdentch1@bloomberg.net, Christiana Sciaudone

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