When a local company puts its stock up for sale and it's priced two dollars more than what was initially proposed by the underwriters, that's good news for the company. When the same stock climbs as much as 76 percent during its first day of trading, that’s heady stuff for the local financial community. But, weeks later, when the stock is still inching skyward for no apparent reason, people start asking questions.

Vienna-based MicroStrategy, a company that makes decision support and data mining software systems, was the most attention-getting IPO to come out of the Washington area for some time. From June 11 – the day the company’s stock started trading – through last week, the stock was climbing steadily, for pretty much no reason at all.

The bubble seemed to have burst by last week: MicroStrategy closed July 2 at $26.25, down $1.50 from the previous day's close, and down from a high of $28.50 at the start of the week. But when the market opened again after the Independence Day holiday, MicroStrategy was at it again, climbing $1.50 by midday. Tech stock investors everywhere were scratching their heads, wondering where the price would settle. In the MicroStrategy chat room of the tech stock Web site Silicon Valley Investor, investors speculated on the company's chances for future success with one eye on its climbing stock price. One participant was content to reserve judgement: "Myself, I'm waiting for the earnings release and subsequent direction to the Street," he wrote. "I buy and sell primarily based upon value principles and try to avoid [Wall Street's] 'darling industry du jour.'"

So is MicroStrategy just the flavor of the month? Should it be ignored like a tag-along younger brother to its bigger tech stock siblings?

There's no denying that MicroStrategy is a hot company. Founded in 1989, the company now employs 700 people. Its IPO filing with SEC outlined ambitions to be the leader in decision support software. Add to that MicroStrategy founder and CEO Michael Saylor's well-publicized vision to turn a computer into a crystal ball. In the company’s filing, Saylor describes a ubiquitous "Query Tone" (think dial tone) on computers that would prompt and allow "any user, anywhere, to ask any question at any time," and receive and answer via integrated databases. An attractive, if not grandiose, idea.

Saylor himself has become a popular face in the press. Although his company didn't use a single cent of venture capital cash, Saylor has been featured frequently in Red Herring, a popular San Francisco monthly magazine of the venture capital and investment communities. MicroStrategy has garnered three stories in a 12-month period, including one that named Saylor as one of the top ten entrepreneurs of 1998. Hype only goes so far, but analysts watching the stock say they see a company with excellent growth prospects and a product for a proven market.

Ken Flemming, an analyst with IPO research firm Renaissance Capital Corp. of Greenwich, Conn., says MicroStrategy has two stories to tell. One is what they're doing now: The company did $53.5 million in sales last year and has a solid client base of blue chip companies. The other is what they want to do in the future: "You might make an argument that based on what they have now the [stock] price is a little high," he says. "If they can do what they are trying to do, then the valuation is justified."

David Hilal, an analyst covering the stock for Friedman Billings Ramsey, who underwrote the deal along with Merrill Lynch & Co. and Hambrecht & Quist, agrees. "I think the stock has done so well because investors are recognizing a truly unique company," he said.

Hilal compares MicroStrategy to other hugely successful enterprise software companies like Pleasanton, Calif.-based PeopleSoft and multi-national SAP AG. He admits that in MicroStrategy's case, the stock may have gotten a little bit ahead of itself. "I expect it will settle in the mid-20s and stay at that level for the short term," he said.

Meanwhile, back at MicroStrategy's ranch, employees have been buzzing about the lively and ever-climbing stock price. Motivated by the stock options MicroStrategy grants to every employee, many keep one eye on the Web to track the company’s current trading price. Said one MicroStrategy employee, "I can think of nothing more detrimental to productivity than an IPO." But David Sherwood, the company's vice president of marketing, says the excitement has died down quite a bit. The company, he explains, had been planning to go public for some time, and was prepared for it. "We're not like other companies who had IPOs close to their date of inception," he says. "We've been running a large-scale organization for some time." Sherwood said the company's focus these days is on rolling out its newest product, the DSS Broadcaster, which can send personalized decision support information to a users pager, e-mail or fax machine. "It's business as usual."

Except, perhaps, on Wall Street.