And who knows? Maybe a banquet will follow.
The Lineup
Bridgepoint Education (NYSE: BPI proposed) and Rosetta Stone (NYSE: RST proposed) are scheduled to go public. Each has a lot in common with what’s already come to the table.
They are: Changyou.com (Nasdaq: CYOU) (UP 56.3 percent from its initial offering price, as of Thursday’s April 9 close) and Mead Johnson Nutrition (NYSE: MJN) (UP 27 percent from its initial offering price).
(Note: The 2009 IPO list excludes the small-cap NIVS IntelliMedia Technology Group (NYSE-Alt: NIV) offering. The deal raised just $1.9 million.)
There were reasons for Changyou.com’s and Mead Johnson’s success. The recipe: Leadership within its industry, growing revenues, profitability, a cheaply priced deal and the winds of a strong stock market at their backs.
The Winning Recipe
Changyou.com, an online game provider in China, priced its IPO of 7.5 million shares at $16 each on April 1. The IPO started trading at $22 per share, UP 37.5 percent from its offering price.
- For the year ended Dec. 31, 2008, Changyou.com reported that its net income was UP 1,937.5 percent to $108 million from $5.3 million for the same period a year ago.
- Changyou.com’s revenues shot UP 379.4 percent to $201.8 million from $42.1 million for the same period a year ago.
- The Nasdaq Composite Index closed on April 9 at 1,652.44, UP 6.51 percent from 1,551.60, its close on April 1.
Mead Johnson, a provider of pediatric nutrition products, priced its IPO of 30 million shares at $24 each on Feb. 10. The offering was increased from 25 million shares. The IPO started trading at $26 per share, UP 8.3 percent from its offering price.
- For the year ended Dec. 31, 2008, Mead Johnson reported that its revenues were UP 12.1 percent at $2.88 billion from $2.58 billion for the same period a year ago.
- Mead Johnson has been around for over 100 years. It was formed in 1905.
- The Nasdaq Composite Index closed on April 9 at 1,652.44, UP 8.38 percent from 1,524.73, its close on Feb. 10, which was just two months ago.
This Week’s IPO Menu
Bridgepoint Education is a San Diego-based provider of postsecondary education services offering associate’s, bachelor’s, master’s and doctoral degrees in business, education, psychology, social sciences and health sciences.
- For the three months ended Dec. 31, 2008, Bridgepoint reported net income of $3.6 million, up from $464,000 for the same period a year ago.
- For the three months ended Dec. 31, 2008, Bridgepoint reported revenues of $69.1 million, up from $33.2 million for the same period a year ago.
Rosetta Stone is an Arlington, Virginia-based provider of technology-based language learning solutions.
- For the three months ended Dec. 31, 2008, Rosetta Stone reported net income of $4.9 million, up from $2.3 million for the same period a year ago.
- For the three months ended Dec. 31, 2008, Rosetta Stone reported revenues of $66.2 million, up from $43 million for the same period a year ago.
However, the IPO handicappers, whose input makes up the SCOOP ratings, see the respective IPOs trading differently in the aftermarket. They report one deal enjoys huge interest, while the other does not have the same demand. Here are a couple of clues:
Industry sectors
Bridgepoint has been classified in the Google Finance Services (sector) – Schools (subcategory). On April 9, the subcategory was DOWN 13.4 percent for the year, underperforming the stock market.
(On April 9, the Nasdaq Composite Index was UP 2.84 percent for the year.)
Rosetta Stone has been classified in the Google Finance Technology (sector) – Software & Programming (subcategory). On April 9, the subcategory was UP 6.3 percent for the year, outperforming the stock market.
Details of the Deals
Bridgepoint Education plans to offer 13.5 million shares at $14 to $16 each. The deal is expected to be priced on Tuesday, April 14, to trade on Wednesday, April 15.
Note: Bridgepoint plans to offer 2.6 million shares and selling shareholders aim to offer 10.9 million shares.
Rosetta Stone plans to offer 6.25 million shares at $15 to $17 each. The deal is expected to be priced on Wednesday, April 15, to trade on Thursday, April 16.
Note: Rosetta Stone plans to offer 3.125 million shares and selling shareholders aim to offer 3.125 million shares.
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