Rosetta Stone (RST), a developer of language learning software, wowed the market with a successful IPO last week. While the initial price was $18.00, the stock has settled in at around $26. Is this the harbinger of a renewed IPO market? Only time will tell.
Business Overview (from prospectus)
We are a leading provider of technology-based language learning solutions. We develop, market and sell language learning solutions consisting of software, online services and audio practice tools primarily under our Rosetta Stone brand. Our teaching method, which we call Dynamic Immersion, is designed to leverage the innate, natural language learning ability that children use to learn their native language. Our courses are based on our proprietary interactive technologies and pedagogical content, and utilize a sophisticated sequencing of images, text and sounds to teach a new language without translation or grammar explanation. We believe our award-winning solutions provide an effective, convenient and fun way to learn languages. We currently offer our self-study language learning solutions in 31 languages. Our customers include individuals, educational institutions, armed forces, government agencies and corporations.
Offer Price: $18.00
Current Price: $26.10
Lead Underwriters: Morgan Stanley, William Blair, Jefferies
Financial Highlights: Revenue: Consumer revenue was $167.7 million for the year ended December 31, 2008, an increase of $60.6 million, or 57%, from the year ended December 31, 2007... Institutional revenue was $41.7 million for the year ended December 31, 2008, an increase of $11.5 million, or 38%, compared to the year ended December 31, 2007. Cost of Revenue: Cost of revenue for the year ended December 31, 2008 was $28.7 million, an increase of $8.0 million, or 38.6%, from the year ended December 31, 2007... Operating Expenses: Sales and marketing expenses for the year ended December 31, 2008 were $93.4 million, an increase of $27.9 million, or 43%, from the year ended December 31, 2007.
Our competitors include Berlitz International Inc., Simon & Schuster, Inc. (Pimsleur), Random House Ventures LLC (Living Language), Disney Publishing Worldwide (DIS) and McGraw-Hill Education (MHP).
- Company website
- BusinessWeek: 'Winners of the Rosetta Stone IPO'
- WSJ Blogs: 'Rosetta Stone: How to Sell an IPO in Difficult Markets'
- Washington Post: Rosetta Stone Shines in IPO