Isle software-maker’s value soars to $347M

A small Maui software firm has made a big splash on the stock market after selling company shares for $5 million.

Kahului-based Code Rebel Corp., which makes and licenses software connecting PC and Mac computer systems, recently sold 1 million shares of stock for $5 apiece to investors who on Tuesday began trading some of the shares that surged to close at $15.85. On Wednesday, shares jumped again to $25.50 on the Nasdaq stock market.

It’s not uncommon for investors to dramatically bid up initial public issues of stock, often in the hope of quickly selling it for more and turning a profit without regard to the prospects of the company whose stock is being traded.

At Wednesday’s closing price, the value of Code Rebel was $347 million, based on 13.6 million shares that exist and are mainly privately held.

By comparison, the so-called market capitalization for the parent company of local phone, Internet and TV service provider Hawaiian Telcom was $268 million on Wednesday based on a $25 stock price and 10.8 million shares, of which 10.1 million are publicly traded on the Nasdaq.

Code Rebel was established in 2007 and is an "emerging growth company" that recently completed a product develop­ment phase and is selling software licenses.

The fledgling firm — which has two full-time employees, some part-time employees and a network of 17 resellers in nine countries — generated revenue totaling $223,453 last year that resulted in a $679,942 net loss. A year earlier, the company had $146,763 in revenue and a $579,587 net loss.

The company intends to use the $5 million it raised to help fund operations, including hiring more staff and expanding marketing and sales.

"I’m proud of our achievement in becoming Nasdaq listed and excited about the new opportunities that being public opens for the company, for our customers and, most of all, for Hawaii and our technology community," said Arben Kryeziu, Code Rebel’s founder and chief executive officer.

Kryeziu, a computer engineer and entrepreneur, founded Code Rebel partly out of frustration with trying to work with Windows-based computers (PCs) and Apple computers (Macs).

"As owners of a web design company, we needed a way to blend a PC and a Mac so that we could work and test our sites on both platforms without the hassle of having two computers, two mice, two keyboards, etc.," the company states on its website. "So we developed this software to make life easier for our own team and hope that you find them helpful as well."

Code Rebel’s software allows PC and Mac users to simultaneously access programs from both operating systems on one device.

The company noted in its stock offering that it has significant competition from much bigger companies, including Microsoft Corp., VMware Inc., Red Hat Inc. and Citrix Systems Inc.

According to the Hawaii Strategic Development Corp., a state agency, Code Rebel’s initial public stock offering was the first such sale by a Hawaii company since Hoku Scientific Inc. in 2005.

Hoku, which initially was in the fuel-cell membrane business, sold 3.5 million shares for $6 apiece, which was about half the price the company wanted. On the first day of public trading, Hoku shares slipped to $5.36. Hoku filed for bankruptcy in 2013 after making a move to produce polysilicon in Idaho. Hoku stock traded last on Tuesday at 1.5 cents a share.