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Investing

Rosetta Stone IPO Has Arrived, And Then Some (RST)

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By Douglas A. McIntyre Updated Published
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Rosetta Stone Inc. (NYSE: RST) has priced its initial public offering of 6.25 million shares of common stock at $18.00 per share.  Of the offering, Rosetta Stone is selling 3.125 million shares of common stock and its selling stockholders are also selling 3.125 million shares in this offering.  What is interesting here is that Rosetta Stone’s pricing is actually better than what many were expecting.

Morgan Stanley and William Blair are the joint book-running managers; and co-managers are listed as Jefferies & Company, Piper Jaffray & Co. and Robert W. Baird & Co.  The underwriting group also has a 30-day over-allotment option to purchase up to an additional 937,500 shares from the selling stockholders.

Earlier this month we saw a price range indication of $15.00 to $17.00 per share.   We have early whisper indications for a premium open to a premium pricing.

The company will have an implied market capitalization of roughly $400 million based upon the pricing, but that will adjust with the share price throughout the day.

Rosetta Stone is the leader in software-based language learning under the Rosetta Stone brand, with more than 30 languages in its self study portfolio.  While individuals are a large portion of revenues, it is also used by education institutions, government agencies, armed forces, and corporations.

Jon C. Ogg

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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