American Public Education IPO Surges

It's a truism that the market for initial public offerings takes its cue from what's happening in the broader market. That's why the first-day performance of online education firm American Public Education Inc. (APEI) is that much more impressive.

Shares of APEI, which comprises American Military University and American Public University and which offers 57 degrees in its online undergraduate and graduate programs, were up $15.88, or more than 79%, to $35.88 in afternoon trading despite further losses in the Dow and Nasdaq. Market turmoil aside, the signs pointed to a strong debut. On Nov. 6 APEI upwardly revised the price range of its offering to between $18 and $19 a share, from $15 and $17. Then on Thursday, it actually priced above the revised range at $20 a share, raising $94 million.

So why all the excitement for a company that offers post-secondary education to the military and public service sector? A quick glance at the company's prospectus shows why. For the six-month period ending June 30, APEI reported net income of $3.6 million on revenues of $30.3 million, versus earnings of $933,000 on revenues of $17 million for the year-ago period. It already has made more money than the $1.8 million it made all of last year and is on track to top its 2006 revenues of $40 million. No matter how dire the markets, investors look for something to trade.

[$$] See Nov. 7 story in TheDeal.com
See American Public Education's prospectus