Foreign language software company Rosetta Stone Inc. priced its initial public offering Wednesday, April 15, above its expected range, raising $112.5 million in the second IPO this week.
The Arlington, Va. company sold 6.25 million shares at $18 apiece – above its expected range of $15 to $17 per share. Rosetta Stone sold 3.125 million shares itself, with selling shareholders offering the balance.
The company expects to begin trade on the New York Stock Exchange Thursday under the symbol RST.
Rosetta Stone is the first IPO to price above its range in nearly a year, MarketWatch noted, with fluid handling systems maker Colfax Corp. being the last to do so in May 2008.
Morgan Stanley and William Blair & Co. LLC are joint book-running managers for the Rosetta Stone offering. Jefferies & Co., Piper Jaffray & Co. and Robert W. Baird & Co. Inc. are co-managers. The underwriters have an overallotment option of 937,500 shares. Fulbright & Jaworski LLP's Brian Fenske is issuer's counsel Cooley Godward Kronish LLP's Brent Siler is underwriters' counsel.
"As a provider of educational software, Rosetta Stone is more resilient to economic slumps than many other software firms," Morningstar analyst Brady Lemos said in a note Wednesday. The note said 20% of sales come from institutional customers, making for somewhat more reliable revenue streams. However, the company's long-term prospects, Lemos said, "hinge on its ability to adapt to competitive threats and consumer tastes."
Rosetta Stone, which sells software, online resources and practice tools for learning 31 languages, marks the second offering this week and the fourth this year.
On Wednesday, San Diego-based online college Bridgepoint Education Inc. debuted on the NYSE, opening at $10.50 per share, its IPO price, which fell below its expected $14 to $16 range. Shares ended trade Wednesday at $11.10.
In the other debuts this year, Chinese online video game company Changyou.com Ltd., a spinoff of Web portal Sohu.com Inc., staged its IPO on the Nasdaq two weeks ago and Mead Johnson Nutrition Co., Bristol-Myers Squibb Co.'s infant formula division, went public on the NYSE in February. Both companies priced at the top of their respective ranges.
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