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Based in Chicago, Illinois, Trustwave Holdings [proposed symbol (TWAV)] scheduled a $100 million IPO with a market capitalization of $684 million at a price range mid-point of $16 for Thursday, August 11, 2011. The full IPO calendar for the week of August 8 includes 12 scheduled IPOs trying to raise almost $2 billion.

OBSERVATIONS -- TWAV is a software as a service company, which is a category often ‘in demand’ on the IPO for two reasons: 73% of top line revenue is from high value subscriptions, gross margin relatively high at 67%.

TWAV helps clients say in compliance with PCI standards. “If you are a merchant of any size accepting credit cards, you must be in compliance with PCI Security Council standards.”

Revenue for the six months ended June 2011 was up 35% compared with the six months ended June 2010. TWAV is still losing money, albeit it a lower rate and did show small profits in the December 2011 and March 2011 quarters.

CONCLUSION -- TWAV’s IPO may be successful with a relatively small premium from the IPO price if it can IPO this week, unless stock market conditions are very negative for IPOs this week.

Valuation Ratios

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

Annualizing June 3 mos

Cap (mm)

Sales

Earnings

BookValue

TangibleBV

in IPO

Trustwave Holdings (TWAV)

$624

4.7

-111

7.4

8.3

16%

TWAV Valuation Metrics

BUSINESS -- TWAV provides on-demand data security compliance solutions that enable businesses and other organizations to achieve and maintain compliance with regulatory requirements and industry standards.

TWAV’s compliance management solutions, including its software-as-a-service TrustKeeper offering, have helped hundreds of thousands of organizations simplify the complex process of validating compliance, according to TWAV.

These solutions assist subscribers, according to TWAVE, in comprehensively securing their network infrastructure, data communications and sensitive information assets, protecting them against the increasing threats of unauthorized access, fraudulent activity and other intrusions or breaches.

SUBSCRIPTIONS -- Subscription revenue accounted for 74% of revenue generated in the March 2011 quarter.

PCI COMPLIANCE -- “If you are a merchant of any size accepting credit cards, you must be in compliance with PCI Security Council standards.”

DATA SECURITY COMPLIANCE -- TWAV believes data security compliance represents a large and growing addressable market, driven in part by PCI compliance.

For example, MasterCard estimates that its payment cards were accepted at 30 million locations worldwide as of December 31, 2010.

TWAV expects financial institutions to increasingly enforce PCI compliance among their payment card accepting customers. In addition, TWAV believes that the number of locations where data is stored or transmitted, and consequently require protection, will continue to increase for financial transactions, as well as health care, government and other services.

INTELLECTUAL PROPERTY -- As of March 31, 2011, TWAV had 18 issued patents and 28 patent applications pending in the United States.

COMPETITION -- TWAV believes it may face potential competition from other sources, including its own network partners, which could become effective competitors.

EMPLOYEES -- As of March 31, 2011, TWAV had approximately 590 employees.

USE OF PROCEEDS -- TWAV expects to net $90 million. The purpose of the IPO is to increase TWAV’s capitalization and financial flexibility to pursue internal and external opportunities, to increase visibility in the market place, to create a public market for common stock and to facilitate TWAV’s future access to the public equity markets.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.