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Apr-16-2009Rosetta Stone $56M IPO set for April 16(topic overview)
CONTENTS:
- NEW YORK (Reuters) - Bridgepoint Education Inc BPI.N shares finished their first day of trading on Wednesday up 5.7 percent, following the college operator's initial public offering, which priced below expectations. (More...)
- Bridgepoint's common stock will commence trading on the New York Stock Exchange on April 15, 2009, under the ticker symbol "BPI." (More...)
- The IPO will put 6.25 million shares on the market, trading under the ticker symbol RST. Half of the shares will be offered by the company itself and half by existing stockholders. (More...)
- This pricing represents a significant decline from $14 to $16 per share the company expected to price recently. (More...)
- About 81 percent of the shares being sold are held by private equity firm Warburg Pincus. (More...)
- Despite the strong results, shares of Intel, a Dow component, slid 4.5 percent to $15.29 in premarket trade after the chipmaker said economic uncertainty ruled out a clear revenue outlook. (More...)
- "Given the state of the market, investors will always be looking for a discount," said Matt Therian, an analyst with Connecticut-based research firm Renaissance Capital. (More...)
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NEW YORK (Reuters) - Bridgepoint Education Inc BPI.N shares finished their first day of trading on Wednesday up 5.7 percent, following the college operator's initial public offering, which priced below expectations. The shares opened at $10.50 on the New York Stock Exchange -- the same level at which they priced in Tuesday's IPO, or 30 percent below the midpoint of the deal's estimate range -- and rose as much as 11.1 percent before closing at $11.10. Its debut performance made Bridgepoint's IPO the third in a row to see a first day "pop," or price jump. San Diego-based Bridgepoint Education sold 13.5 million shares, raising $141.75 million in the IPO, the third on a U.S. exchange this year. [1] Bridgepoint Education Inc.' s initial public offering of 13.5 million shares priced at $10.50 a share Tuesday, well below the expected range of $14 to $16. Bridgepoint, which begins trading Wednesday on the New York Stock Exchange under the symbol BPI, is the first of two IPOs scheduled this week - and the second this month - after a long drought.[2]
Foreign language software specialist Rosetta Stone Inc. (RST) sold its initial public offering at $18 a share Wednesday, the first IPO to price above its expected range in nearly a year. The company, scheduled to begin trading Thursday on the New York Stock Exchange under the symbol RST, sold 6.25 million shares for a dollar more per share than its expected range of $15 to $17, which was set by underwriters Morgan Stanley and William Blair.[3] Bridgepoint Education, a San Diego-based provider of online and classroom education services, is set to price its $216 million IPO later Tuesday and to begin trading on the New York Stock Exchange Wednesday under the ticker symbol BPI. The stock is expected to price between $14 and $16 a share. Arlington, Va. -based language-software maker Rosetta Stone is set to price shares between $15 and $17 for its $106 million IPO. Analysts expect the offering to price on April 16, with shares trading under the ticker RST the following day. What's especially notable about both IPOs is the small number of shares being offered.[4] Bridgepoint Education Inc.' s (BPI) initial public offering provided a lesson in hope for investors Wednesday, with the new stock gaining 6% on its first day of trading after pricing poorly. The online college's shares closed at $11.10 on the New York Stock Exchange, up from its IPO price of $10.50.[5]
The stock began trading Wednesday morning on the New York Stock Exchange under the ticker symbol BPI. While the lower-than-expected pricing could be considered a setback for an already-struggling IPO market, all hope is not lost. For one, Bridgepoint shares were lately up 9.5% at $11.50. That's better than rival Grand Canyon Education ( LOPE Quote ) fared on its first day of trading. Before Grand Canyon's IPO priced in November, it had to cut its price range only to see a first day return of negative 1.3%.[6]
Bridgepoint Education, a San Diego provider of higher education classes mainly to online students, issued 13.5 million shares of common stock April 14 on the New York Stock Exchange under the ticker BPI, with the initial price going out at $10.50 and rising to $11.20 at the close.[7]
The latest company to brave the public markets may have wished it had stayed on the sidelines. Bridgepoint Education, an operator of online and campus universities, priced its initial public offering at $10.50 a share on Wednesday. Reuters points out that the price is 30 percent below the midpoint of its previously estimated priced range of $14 to $16. In a filing the company made Wednesday with the Securities and Exchange Commission, Bridgepoint said it sold 13.5 million shares for $10.50, about 74 percent of which were sold by its original investors, including the private equity firm Warburg Pincus. Bridgepoint is only the third company to go public in the United States this year (and one of them, Changyou.com, is based in China).[8] The San Diego higher education company sells 13.5 million shares at $10.50 each, far below the $14 to $16 it had sought. San Diego-based higher education company Bridgepoint Education Inc. faced a tough investor crowd when the firm floated its initial public stock offering late Tuesday.[9]
NEW YORK, April 14 (Reuters) - Bridgepoint Education Inc's BPI.N initial public offering priced at $10.50 per share, below its estimated range of $14 to $16, a source with knowledge of the deal said on Tuesday.[10] Bridgepoint Education shares priced on Tuesday at $10.50 -- 30 percent below the midpoint of the estimated range of the company's initial public offering -- raising $141.75 million. The shares opened at $10.50 and rose as much as 11.1 percent before trimming those gains.[11]
Rosetta Stone sold 6.25 million shares, raising $112.5 million, after shares priced above the estimated $15 to $17 range, the first IPO to do so since pumpmaker Colfax Corp's deal in May 2008. Investors' embrace of Rosetta Stone stands in contrast to the reception given Tuesday to college operator Bridgepoint Education Inc. which had to shave 30 percent off its estimated price to get its IPO to the market.[12] Rosetta Stone sold 6.25 million shares, raising about $112.5 million, in a deal that is the fourth IPO on a U.S. exchange so far in 2009 and the third in April, the busiest month for IPOs since July 2008. Rosetta Stone, which initially filed for its IPO in September 2008, becomes the first publicly traded stand-alone language instruction company. Its main rival, Berlitz, is privately held.[13]
NEW YORK (Reuters) - Rosetta Stone Inc shares priced at $18 in the company's initial public offering, above the estimate range, a source with direct knowledge of the deal said on Wednesday, making it the fourth IPO on a U.S. exchange in 2009 as equities markets struggle to stabilize.[12] NEW YORK, April 15 (Reuters) - Rosetta Stone Inc (RST.N: Quote, Profile, Research ) shares priced at $18 in the company's initial public offering, above the estimated $15 to $17 price range, a source with direct knowledge of the deal said on Wednesday.[13]
Rosetta Stone Inc., which makes software that helps people learn foreign languages, has priced the shares of its initial public offering at $18 apiece and will begin trading on the New York Stock Exchange April 16, the company announced late Wednesday.[14] The offering includes 3.50 million shares offered by the company and 10 million shares offered by its selling stockholders. The company founded in 2004 and headquartered at San Diego, California said its common stock will commence trading on the New York Stock Exchange on April 15, 2009, under the ticker symbol "BPI."[15]
William Blair & Company, L.L.C., BMO Capital Markets Corp., Piper Jaffray & Co., and Signal HillCapital Group, LLC, acted as co-managers for the IPO. On the first of this month, Bridgepoint had revealed, in a regulatory filing, its intention to issue 13.5 million shares through an IPO, but had expected to price the offer at $14.00-$16.00 per share. The company had also said that it is selling 2.615 million shares of its common stock and the selling stockholders are selling 10.885 million shares of common stock. At that time, the company had estimated to raise net proceeds of $30.6 million from the offering, assuming an IPO price of $15.00 per share. The company said that the holders of its Series A Convertible Preferred Stock can optionally convert their shares into shares of common stock immediately prior to the closing of this offering. Upon such conversion, in addition to receiving shares of common stock, the holders would be entitled to receive the accreted value of $27.6 million of the Series A Convertible Preferred Stock. This would be paid out of the net proceeds from the offering, the company had confirmed, and had added that he balance of net proceeds was intended to be used for general corporate purposes.[15] Bridgepoint Education, a for-profit education company that runs Ashford University and University of the Rockies--both on campus and online--raised $141.8 million on Apr. 15. That was less than the company and private equity investor Warburg Pincus expected to raise. To attract investors, Bridgepoint cut its offering price to 10.50 per share, from an expected range of 14 to 16. On its first day of trading, the stock closed at 11.10, up 5.7%.[16] Owned primarily by Warburg Pincus, Bridgepoint is the first venture-capital backed IPO since web hosting company Rackspace Hosting' s $187.5 million IPO in August 2008, according to Thomson Reuters. Part of Bridgepoint's problem might have been its pricing. Bridgepoint's valuation was similar to that of rival and fellow recently public university operator Grand Canyon Education Inc., even though as the newest entrant among education stocks, it would be expected to offer a discount. Connecticut-based Renaissance Capital analyst Matt Therian told Reuters he guessed Bridgepoint was betting its lower tuition and easier credit transferrability would convince investors Bridgepoint would continue its torrid pace of growth and to pony up.[17]
The market for I.P.O.' s has been virtually silent for months as investors shunned new equity offerings. One of the main factors affecting Bridgepoint's offer price may have been the recent drop in the share prices of rivals such as Grand Canyon Education, which is down 10 percent in the month. Like Bridgepoint, Grand Canyon made waves last fall with its stock offering, breaking a drought in new stock sales. Grand Canyon cut its offer price from $20 a share to $12 a share as investor demand dried up.[8] An issue for Bridgepoint may have been that most of the stock sale won't benefit the firm directly: The company's investors sold 81% of the shares in the IPO. Bridgepoint sold the rest, raising about $27 million, part of which is designated to pay off preferred stock. Bridgepoint is just the third IPO completed this year.[9] There was an estimated pricing range of $14.00 to $16.00 per share.'' Our issue with this IPO is that 10 million shares were being sold by Warburg Pincus and affiliates as insiders.'' If the overallotment option is not exercised, this would represent only 3.5 million shares being sold by the company itself.'' IPO investors generally do not like to see all of their fresh investment going to pay off private equity or venture backers.''[18] Bridgepoint, a San Diego-based operator of online and campus universities, sold 13.5 million shares, raising $141.75 million, the source said. The company had estimated its IPO could raise as much as $216 million.[10] San Diego-based Bridgepoint sold 13.5 million shares for $10.50 each, raising $141.75 million, the source said, far less than the company's original estimate that the IPO could raise as much as $216 million.[19]
The San Diego-based provider of online and classroom education services expected to price a $216 million IPO in range to $14 and $16 a share, but the offering ultimately priced at $10.50 a share, raising only $141.75 million.[6] Putting cold water on the idea that the IPO market was beginning to move past its doldrums, at least for fast growing companies, Bridgepoint Education's IPO priced 30 percent below expectations Tuesday night, going for $10.50 per share, a far cry from the $14-$16 range the college operator had hoped for. Bridgepoint''broke a short-lived two-IPO streak that saw Mead Johnson Nutrition Co and Changyou.com price at the top of their ranges and soar in their market debuts. That was despite Bridgepoint's enviable 150 percent revenue growth in 2008. Bridgepoint's IPO brought some hope to venture capitalists, who have had to contend with a 90 percent drop in VC-backed IPOs in 2008, and are looking for an exit for their portfolio companies.[17] Bridgepoint Education ( BPI ) went public on Apr. 15 with modestly disappointing results. Rosetta Stone ( RST ), set to launch on Apr. 16, sold its shares a day earlier for a premium, the first IPO to price above its anticipated range in almost a year. Some observers consider the mere existence of these debuts a hopeful sign that the IPO market could revive this year. "It's highly encouraging," says William Smith, president and chief executive of Renaissance Capital, based in Greenwich, Conn. With just a few exceptions, "the market's basically been closed since August of last year." Until this week, only two IPOs had premiered this year: Mead Johnson Nutrition ( MJN ), a U.S. maker of baby food spun off from Bristol-Myers Squibb ( BMY ), and Chinese video game maker Changyou.com ( CYOU ).[16] Bridgepoint Education ( BPI Quote ) saw its initial public offering, or IPO, price 30% below the midpoint of its estimated range, although investors are still hoping to see the same high returns as other recent offerings.[6] Bridgepoint Education (NYSE: BPI) was a quasi-stealth initial public offering when you consider how few IPO's we have seen over the last 8-month period.''[18]
SAN DIEGO, April 15 /PRNewswire/ -- Bridgepoint Education today announced the pricing of its initial public offering of 13,500,000 shares of its common stock at $10.50 per share.[20] Warburg Pincus Private Equity VIII, L.P. has granted the underwriters a 30-day option to purchase up to 2,025,000 shares of common stock at the initial public offering price to cover over-allotments, if any.[20]
Warburg Pincus Private Equity VIII, L.P., which owns 68.5% of Bridgepoint shares, has granted the underwriters a 30-day option to buy up to 2.03 million common shares at the IPO price to cover over-allotments, if any.[15]
Rosetta said it plans to sell 3.125 million shares with the IPO, while the same number of shares will be sold by existing stockholders. All that remains to be seen is if both Rosetta Stone and Bridgepoint can garner the same amount of investor interest as the only two other IPOs priced in 2009.[4] Institutional investors, which comprise the bulk of IPO buyers, must be willing to take the risk in order for an IPO to be successful. Chinese video game maker Changyou.com Limited ( CYOU Quote ) priced its IPO on April 1 at $16 a share, and the limited amount of shares offered (7.5 million) attracted a lot of attention from investors.[4] If Bridgepoint's gain holds through the end of the session, it will mark yet another strong return in what has been a very difficult environment. Among the other winning IPOs, Chinese video game maker Changyou.com Limited ( CYOU Quote ) priced its IPO on April 1 at $16 a share.[6]
Underwriters reduced the planned IPO price between $14 and $16 per share. Bridgepoint said it had more than 31,000 students enrolled in its colleges as of Dec. 31, up 150 percent from the prior year's enrollment.[7] NEW YORK, April 14 (Reuters) - Bridgepoint Education Inc, BPI.N an operator of online and campus universities, became the third U.S. company to go public this year, but priced its deal 30 percent below the midpoint of its estimate range of $14 to $16, a source with knowledge of the deal said on Tuesday.[19] NEW YORK (Reuters) - Bridgepoint Education Inc BPI.N shares were up 7 percent at $11.22 in their market debut on Wednesday morning.[11]
Bridgepoint's common stock will commence trading on the New York Stock Exchange on April 15, 2009, under the ticker symbol "BPI." [20] The company began trading today on the New York Stock Exchange under the symbol BPI.[21]
The IPO will put 6.25 million shares on the market, trading under the ticker symbol RST. Half of the shares will be offered by the company itself and half by existing stockholders. [14] The company, which in late December said it hoped to raise as much as $230-million by going public, instead drew just under $142-million, selling 13.5 million shares at $10.50 each. (As recently as last week, it said it hoped to fetch as much as $16 per share.)[21] The company sold 13.5 million shares at $10.50 each -- far below the $14 to $16 a share it had hoped to fetch.[9]
The company sold 6.5 million shares at 18 on Wednesday, raising $112.5 million.[16] The online and campus university operator sold 13.5 million shares in the offering, raising $141.75 million.[22]
The initial public offering raised $141.75 million for the company which operates two subsidiaries, Ashford University and the University of the Rockies.[7] An online education company has raised $142m ('''108m) in only the second initial public offering from a U.S. company in 2009. It comes ahead of software firm Rosetta Stone'''s listing tonight that will mark the first time there has been two flotations from U.S. companies during the same week, in almost a year.[23] The owners of Bridgepoint Education, a five-year-old higher-education company where nearly all the 31,000 students attend online, got a more tepid response to their initial public offering than they were hoping for this week.[21]
Credit Suisse and JPMorgan were listed as underwriters in the IPO. Online auction company eBay Inc is planning to spin off its Skype unit through an initial public offering.[22] Two initial public offerings scheduled for this week will mark the busiest period for the IPO market since August, a hint that institutional investors may be ready to take risks on new public companies.[4]
Bridgepoint's offering makes the end of the longest-ever period without an initial public offering from a venture-backed company in the United States, according to Thomson Reuters.[8]
The last venture-backed exit in the United States was in August 2008, when Rackspace Hosting came to market with a $187.5 million offering. The bulk of the money from Bridgepoint's offering will go to its previous backers. The company itself raised $28.3 million from the sale, its prospectus said.[8] Arlington-based Rosetta Stone's sale of about 3.13 million company shares will bring in about $56 million, which will be used to repay debt and possibly finance acquisitions.[14] The relatively small size of the deal's "float", or the number of shares sold, helped Rosetta Stone command a strong price, though analysts said the company could have raised far more money in the oversubscribed deal.[12] The deal's structure, in which most of the shares were sold by an existing shareholder with very little money going to the company, and a recent drop in the stocks of Bridgepoint's rivals caused the deal to be priced less than expected, an analyst said.[19]
The stock is now at $26.60 a share, good for nearly a 70% increase, according to Renaissance Capital, which operates the Web site IPOHome.com. Mead Johnson Nutrition ( MJN Quote ), the Evansville, Ind. -based baby-formula maker, saw a first-day return of 10.1% after it priced its IPO at $24 a share on Feb. 10.[6] The IPO's underwriters, led by Morgan Stanley (MS.N: Quote, Profile, Research ) and William Blair & Co, have the right to purchase up to an additional 937,500 shares of common stock to cover over allotments.[13]
You need a stable market." Investment bankers selling IPO shares may have what they wanted--at least temporarily. The Standard & Poor's index of 500 stocks is up almost 25% since its bear market low on Mar. 9.[16]
In a statement Wednesday, Bridgepoint said 74 percent of the shares sold in the IPO were offered by selling stockholders. In its last regulatory filing prior to the IPO, Bridgepoint had said that figure would be 81 percent.[1] Rosetta'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.[13]
Bridgepoint said in a regulatory filing it plans to sell 13.5 million shares, while Rosetta is set to sell 6.25 million shares.[4] Credit Suisse and J.P. Morgan were the lead underwriters; and co-managers were William Blair, BMO Capital Markets, Piper Jaffray, and a firm called Signal Hill Capital Group.'' Those underwriters also have an overallotment option of 2.025 million shares.[18] The underwriters, led by Credit Suisse (CSGN.VX: Quote, Profile, Research ) and JP Morgan (JPM.N: Quote, Profile, Research ), have the option to buy up to 2.025 million shares additional shares to cover over-allotments.[10]
This pricing represents a significant decline from $14 to $16 per share the company expected to price recently. [24] The stock traded as low as $9.75 as the lowest post-price tick today, but shares are currently at $11.19.'' The good news is that this still technically qualifies as an up-IPO if you got in on the price.[18] The stock is now at $27 a share, good for nearly a 70% increase, according to Renaissance Capital, which operates the Web site IPOHome.com.[4]
The company was planning to raise $100 million on Apr. 16, with shares going for 15 to 17.[16]
The offering included 3,500,000 shares offered by Bridgepoint Education and 10,000,000 shares offered by selling stockholders.[20] Bridgepoint Education's postsecondary education services focus on offering associate's, bachelor's, master's and doctoral programs in the disciplines of business, education, psychology, social sciences and health sciences. Bridgepoint Education's regionally accredited academic institutions - Ashford University and University of the Rockies - deliver their programs online as well as at traditional campuses located in Clinton, Iowa, and Colorado Springs, Colorado, respectively.[20]
Most of the proceeds of the sale will go to the main investors, Warburg Pincus. Bridgepoint, which previously acquired two nonprofit colleges Ashford University, in Iowa, and the University of the Rockies, in Colorado said its net income for 2008, on revenues of $218-million, was $26.4-million.[21] Bridgepoint, owned primarily by Warburg Pincus, also ended the stock market's longest-ever span without a venture-capital backed IPO, according to Thomson Reuters data.[1] The company's revenue rose 53% last year and its profits surged 450%. Sweet notes that--in contrast to Bridgepoint, which faces several large competitors in the for-profit education industry--Rosetta is the first outfit of its kind to go public, with "brand awareness" more than seven times that of its closest rival. The question is, can the IPO market really emerge from its deep slump? According to Dealogic, in the first quarter of 2009, IPO volume was down 95% from the same period a year ago.[16] Apparently, investors disagreed. Give Bridgepoint credit for launching an IPO at all in the toughest market in years. (Another three companies have cancelled IPO plans in the past week, including Al Gore's Current TV.) The latest test for how much the IPO market is reopening comes Wednesday night when language learning tool provider Rosetta Stone attempts its IPO.[17] Rosetta Stone, founded in 1992 as Fairfield Language Technologies in Harrisonburg, Va., recorded revenue of $209.4 million in 2008, up from $137.3 million the previous year, and net income of $13.9 million, compared with $2.5 million in 2007.[14] If foreign language software maker Rosetta Stone Inc.' s begins trading on the NYSE under the symbol RST.[2]
About 81 percent of the shares being sold are held by private equity firm Warburg Pincus. Rivals Grand Canyon Education Inc ( LOPE.O ) and Apollo Group ( APOL.O ) have seen their shares drop about 22 percent and 30 percent, respectively, since their January highs. [19] Shares of several Bridgepoint rivals have been under pressure on concerns about the industry's growth outlook. DeVry Inc. shares are off 26% this year, Apollo Group is down 18% and Grand Canyon Education is off 22%.[9]
Despite the strong results, shares of Intel, a Dow component, slid 4.5 percent to $15.29 in premarket trade after the chipmaker said economic uncertainty ruled out a clear revenue outlook. [22] Bridgepoint earned $26.4 million in 2008 on revenue of $218 million.[9]
"Given the state of the market, investors will always be looking for a discount," said Matt Therian, an analyst with Connecticut-based research firm Renaissance Capital. "It shows that a deal can get done, if it is priced right." [1] In tumultuous market conditions, when investors won't take risks on new IPOs, "everything just goes on hold," says Smith.[16] The amount of insider selling, and second the stocks of the comparables have fallen," said Scott Sweet, senior managing director with research firm IPO Boutique.[19]
SOURCES
1. Bridgepoint Education ends first day up 5.7 percent | Reuters
2. Article - WSJ.com
3. Article - WSJ.com
4. IPO Market Thawing in April | Business News Update | Financial Articles & Investing News | TheStreet.com
5. Article - WSJ.com
6. Bridgepoint IPO Priced Low, but Shares Rise | Business News Update | Financial Articles & Investing News | TheStreet.com
7. San Diego Business Journal Online - business news for San Diego, California
8. Bridgepoint Debut Comes With Big Price Cut - DealBook Blog - NYTimes.com
9. Bridgepoint IPO gets a lukewarm reception - Los Angeles Times
10. Bridgepoint IPO prices below range at $10.50- source | Markets | US Markets | Reuters
11. Bridgepoint Education shares up 7 percent in debut | Deals | Reuters
12. Rosetta Stone IPO prices above estimate range | Reuters
13. UPDATE 1-Rosetta Stone IPO prices at $18, above range-source | Markets | US Markets | Reuters
14. Rosetta Stone to get $56M in April 16 IPO - Washington Business Journal:
15. RTTNews - Latest Earnings,Upcoming Earnings, Pos Pre Announcements, Pos Pre Announcements , Positive Surprises, Negative Surprises, Hot Stocks, Stock Split Calendar, Stock Buybacks, Dividends, Negative, Positive PreAnnouncements,Surprises .
16. Are IPOs Slowly Making a Comeback? - BusinessWeek
17. DealZone » Blog Archive » Disappointing Bridgepoint IPO brings glimmer of hope to VCs | Blogs |
18. Heads & Tails Review For Bridgepoint IPO (BPI) - 24/7 Wall Street
19. UPDATE 2-Bridgepoint IPO prices 30 pct below range-source | Deals | Private Capital | Reuters
20. Bridgepoint Education :: Bridgepoint Education Prices Initial Public Offering and Lists on New York Stock Exchange
21. Young College Company Gets Lukewarm Response From WallStreet - Chronicle.com
22. Business finance news - currency market news - online UK currency markets - financial news - Interactive Investor
23. Two in a week boost US IPO market
24. RTTNews - Latest Earnings,Upcoming Earnings, Pos Pre Announcements, Pos Pre Announcements , Positive Surprises, Negative Surprises, Hot Stocks, Stock Split Calendar, Stock Buybacks, Dividends, Negative, Positive PreAnnouncements,Surprises .
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