Rosetta’s rosy IPO

rosettttaForeign language specialist Rosetta Stone became a public company today when it issued 6.25 million of its shares for a total of $112.5 million.  What created the buzz was the higher than expected initial public offering price of $18/share, which beat the $15-17 estimates.  As the fourth IPO for 2009, it  was the first in a year to bear estimates; Colfax Corp’s (CFX) deal in May 2008 was the last.

Some tidbits from Yahoo! Finance:

The Arlington, Virginia-based company offers language instruction products in 31 languages, with its beginners’ French package, for example, selling for $259, according to its Website. In 2008, Rosetta Stone’s revenue rose 52 percent to $209.4 million from 2007, with net income of $13.9 million, according to a regulatory filing.

But Rosetta Stone has ramped up efforts to limit exposure to cash-strapped consumers by focusing on sales to corporations and the U.S. government.

Rosetta Stone’s main shareholders are ABS Capital Partners, whose shares prior to the IPO gave it 44 percent of votes and Norwest Equity Partners with a stake of 29 percent of votes, according to a regulatory filing. Following the IPO, those stakes will fall to 28 percent and 18 percent, respectively.

It did exceptionally well on its first day, rising by about 40% from its IPO price to close at $25.12.


Source: CNBC


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