Will this IPO translate into turnaround?
Rosetta Stone, the language software maker, is one of the few companies to file an IPO this year. With a strong market debut, will other companies follow suit? Jennifer Collins reports.
Rosetta Stone software to learn Tagalog. (rosettastone.com)
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Kai Ryssdal: There's a new face on Wall Street today. The language learning software company Rosetta Stone filed for an initial public offering. An IPO, that's when a company first offers its shares to investors. We explained it because if it feels like you haven't heard that phrase in a while, there's good reason. Only a handful of companies have dared go public in this bear market. Marketplace's Jennifer Collins reports.
JENNIFER COLLINS: Maybe investors woke up to this commercial on CNBC.
ROSETTA STONE: So call now or visit our Web site and see for yourself why Rosetta Stone is the fastest way to learn a new language guaranteed.
Some may have called in for the software. Others called their stockbrokers. Rosetta Stone has had one of the most successful stock-market debuts in a year. David Menlow with IPOFinancial.com says the company's stock offering was a hit partly because of its marketing.
DAVID MENLOW: Basically anytime people heard about any foreign-language procedure or application the first words out of their mouth were Rosetta Stone.
There were other factors, like Rosetta Stone's profits, which had quadrupled since 2007. And then there was the stellar IPO of another company this month: a chinese videogame maker called Changyou.
BILL Buhr: They priced at the top of their range.
That's equity analyst Bill Buhr of Morning Star.
Buhr: And immediately skyrocketed on the first day of trading.
He says investors are just waiting for good reasons to buy. Changyou.com climbed 25 percent on the first day. That splash helped lure in Rosetta Stone and another education company Bridgepoint. Again, Bill Buhr.
BUHR: I am not ready to say you're going to see the floodgates open with a number of IPOs. I think you're going to see companies maybe think about braving the market.
He says it will be a long time before the market returns to the glory days of 20 IPOs a month. That was the average just a few years ago. So the smart companies may want to sit out this pool party for now.
I'm Jennifer Collins for Marketplace.
Comments
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From Columbus, OH, 04/17/2009
I'm considered a small-time investor so I don't get access to these things called IPOs. (not that I'm bitter or anything...)
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