Quest Software Shares Move Up 9%
Quest Software Inc., a database software company that made a spectacular stock market debut recently, saw its shares move up 9% Wednesday, a day after a report that the company’s chairman bought 28,500 shares over six days in August.
Quest shares closed at $54.50, up $4.50, after touching $58.88 earlier in the trading session. The stock also rose 9% on Tuesday.
The Newport Beach-based company, which helps companies manage and retrieve information from large databases, first sold shares to the public at $14 each on Aug. 12. In the first day of trading Aug. 13, the shares more than tripled, making Quest one of Orange County’s most valuable public companies.
Chairman and Chief Executive Vincent Smith said his purchase “could be moving the stock.” The software maker’s investment bankers said large institutional investors are buying more shares, he said, though he added that he wasn’t told which investors.
Smith said his purchase is evidence of his confidence in Quest. He owns 18.3 million shares worth just under $1 billion, based on the stock’s closing price Wednesday.
Smith said his Quest stock represents 40% to 45% of the company’s outstanding shares. He said he has holdings in other software companies, such as Peregrine Systems Inc. and Remedy Corp., as well as software companies in the same field as Quest that he declined to name.
Analyst Melissa Eisenstat of CIBC World Markets Inc. said many of the large institutional investors own shares of Quest, although she declined to give names. Several investors indicated to her that they were interested in purchasing more shares after the initial offering, she said.
“I think a lot of people wanted more,” said Eisenstat, who rates the stock “buy.”
Quest, whose customers include AT&T; Corp., makes software that permits electronic gathering and distribution of data through computer systems and the Internet. Another product backs up information stored in Oracle Corp. databases. Quest also makes software to monitor and identify problems with large databases.
Quest earned $1.31 million on sales of $28.3 million for the six months ended June 30, compared with $899,000 on sales of $14 million for the same period the year before.
