Did Rosetta Stone unlock locked-down IPO market?

NEW YORK -- Investors who got in on the deal made fast money. That bullish fact meshes nicely with the language-learning software company's brand-building TV ad — starring Olympic swim champ Michael Phelps — that gained popularity last summer touting Rosetta Stone's unique ability to teach people how to learn a new language in no time.

Indeed, in what has been a bleak, barren landscape for IPOs since the financial crisis erupted last summer (Rosetta Stone was only the fourth company to go public this year), the Arlington, Va.-based firm not only had the courage to attempt to raise cash by going public and issuing stock, but was successful in doing so. Its success could signal a thawing of the IPO market and signal that investors are willing to take on more risk.

The final offering price came late Wednesday at $18 a share, up from an estimated range of $15 to $17 — the first IPO to price above its range in almost a year. Thursday, the shares jumped $7.12, or 40%, to $25.12. It was the best first-day IPO pop since fertilizer maker Intrepid Potash rose 58% last April, says IPOhome.com.

A 'digital solution'

Commenting on the rosy reception from Wall Street, Rosetta Stone's multilingual CEO, Tom Adams, expressed his delight in his native Swedish: "Det är otroligt roligt att vi har börsnoterats på New York Stockexchange." Translation: "It is incredibly wonderful to go public at the NYSE."

Adams calls Rosetta Stone's interactive teaching tools — delivered via CD-ROM or the Internet — a "digital solution" to language education around the globe. "We're changing the way people learn new languages," he says.

The company, which has customers in more than 150 countries and provides educational materials in 31 languages, targets individuals, businesses and schools, as well as the U.S. government and military. Demand for software teaching Mandarin Chinese and Arabic is rising.