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Blue Ridge Capital Responds to Workday Inc.’s Mid-October IPO, Almost 7% Ownership

October 29, 2012 | About:
Guru investor John Griffin’s Blue Ridge Capital has introduced newly public business software company, Workday Inc. (WDAY) to its hedge fund portfolio on Oct. 18, according to Griffin’s recent 13G SEC filing.

With an ownership of 6.87%, the transaction totaled to more than $96 million and a new shareholding of 1,798,000 shares. Each was purchased at $53.42 per share.

On Oct. 11, Workday announced the price for its initial public offering. For the 22,750,000 shares of its Class A common stock that consisted of the offer, each were to be traded at $28.00 per share.

The stock started trading in the New York Stock Exchange under the symbol WDAY the next day, where it experienced an almost 70% jolt by the end of the day; its price has about doubled since the day of its IPO price announcement.

Founded in 2005 by Peoplesoft’s former chairman Dave Duffield and former chief executive officer Aneel Bhusri, Workday develops cloud-based applications tailored to improve several services relevant to all businesses, including financial management, human capital management, global payroll solutions, time tracking, expenses and procurement.

With a business model driven by the growing market of SaaS-based solutions (software as a service), Workday incorporates self service, seamless management and cloud integrations to deliver to its client base, which range from academic institutions and large corporations, to online companies such as Ancestry.com and Yahoo!.

Over the last few months, Workday news has revealed significant moves for expansion.

In May, Workday announced the company’s new Europe-based clients including Direct Line Insurance Group PLC headquartered in England, Ramboll headquartered in Denmark and Scandic Hotels headquartered in Sweden.

In July, Workday welcomed companies from several new industries to provide its services to; these industries include the gaming, automotive, health care and defense industries.

“When enterprise software emerged decades ago, the concept of global business had not yet evolved. Businesses were siloed by regions, and software was designed to support that approach," Duffield said in Workday press release. "At Workday, global functionality for today's businesses is built into the core of our solutions, which we now support in more than 219 countries. We welcome these new customers to Workday."

Workday Inc. is currently trading at $50, with a market cap of $1.14 billion.

With an investment philosophy that involves picking industry-dominating stocks that can “produce superior return over a three to five year time period,” according to its Gurufolio report, Blue Ridge Capital is the only value investor on GuruFocus thus far who has acquired Workday since it’s been named a public company.

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About the author:

Dianne Tordillo
Dianne Tordillo is staff writer for GuruFocus.com. She reports on a variety of financial news, primarily dealing with investor portfolios and stock trades. Her articles also highlight insider trades, as well as the many useful features of GuruFocus.

Visit Dianne Tordillo's Website


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