On December 7, 2001, St. Paul–based Lawson Software went public, listing with Nasdaq under the ticker symbol LWSN. It was a great leap for Lawson. Founded in 1975, the company grew to become an important player in the enterprise resource planning (ERP) software market, which expanded rapidly in the 1990s. While larger companies like SAP, PeopleSoft, and Oracle battled for the bigger accounts, Lawson has specialized in the middle range of the market.

 

As it turned out, 2001 was a challenging time for Lawson to go public. During the tech bust, the ERP space saw demand decline and companies consolidate—a notable example being Oracle’s (protracted) acquisition of PeopleSoft. Lawson was a survivor of this contraction, but it still struggled in some quarters, even posting losses. Its stock price reflected those struggles and changes. Opening at $15 at its initial public offering, Lawson’s stock price would rise a bit in the next few days to $17.50, hover around $16 for several months, then begin to drop until in touched $4 in May 2002. It would go under $4 that fall, and stay there until 2003, when it oscillated in the $4 to $6 range. Over the past year, the price has generally trended upward: On May 3, it closed at $7.65.

"You always have to ask, 'What's the long-term impact of . . . short-term decisions?'"

Overseeing Lawson’s transition from private to public was Jay Coughlan, who became the company’s CEO and president in February 2001. The Philadelphia-born Coughlan began his career as a salesman for Lawson in 1987 and moved rapidly up through the organization. He led a new team of top-level management at the company in preparation for its IPO.

 

Coughlan left Lawson in June 2005, and was succeeded as CEO by Harry Debes. Coughlan now works with St. Paul market-consulting firm Pangea Group, and is looking into other ventures. It seemed like a good time to ask him about his challenges as a CEO taking a company public.

 

{Q} So, why did Lawson go public?

{A} A couple of reasons. One was, that was in 2001. We were at the peak of the dot-com bubble. And stock options for employees were becoming such a huge issue—we were losing people [because of] compensation purposes. But not [because of] salary or bonuses—it was [due to a lack of] stock options.

The other was to raise cash. A little bit for expansion purposes, but more because we were in an industry where most of the big competitors hoarded huge amounts of cash. Oracle had billions, Microsoft had billions. It was unbelievable. So in order to look financially viable, we had to have a big cash surplus. We raised $200 million in cash through that process. We were able to keep a huge chunk of it on our balance sheet for competitive purposes. Although we used some of it to buy companies and such as well, it was really to reassure our customers that we were going to be around for a while. 

 

{Q} What was it like those first couple of months after Lawson went public?

{A} When we first went public, it was a 90-day sprint. We had to prepare our story and then hit the road. It was intense, because in a three-week period of time, you’re seeing two-thirds of the world’s money; and on certain days, you’re giving five presentations in five different cities. New York City was our worst. We did 13 in one day, and you’re just like a machine after a while. But you have to be at the top of your game each time, because the analysts really understand this business and the indicators.

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