MARKET SNAPSHOT: Rosetta Stone Is Year's Best Performing IPO So Far

By Kate Gibson

The much-touted stock-market debut of Rosetta Stone Inc. is living up to its billing, with the language-software maker's initial public offering the first to price above its expected range in nearly a year and its shares on Thursday rising more than 40%

"Rosetta could end up being the best-performing U.S. IPO since fertilizer company Intrepid Potash Inc. (IPI) rose 58% on its debut in April 2008," said Scott Sweet, senior managing partner at IPO Boutique.

Of course given the dearth of IPOs in recent months, the competition is limited. "After the first quarter of last year the IPO market went into a virtual dormant state. This is amongst the slowest periods in decades," said Sweet.

"An increase in successful IPOs is probably a good sign for the markets but at the same time, we have a long way to go before a sense of normalcy is restored," said Dan Greenhaus, equity strategy Group, Miller Tabak & Co.

In the second public offering this week and fourth for the year, Rosetta Stone (RST) on Wednesday priced its IPO at $18, with the sale of 6.25 million shares raising $112.5 million. It was the first IPO to price above its range since valve company Colfax Corp. (CFX) went public last May.

In midday trade, shares of Rosetta Stone were up $7.31, or nearly 41%, at $25.31, near an earlier high of $26.27.

The company's marketing campaign, which first featured Olympic swimmer Michael Phelps and now includes commercials airing in prime time, has translated into a brand awareness more than seven times that of its closest competitor, closely held Berlitz International Inc., said Sweet.

Stocks wavered between gains and losses on Thursday, with financials fronting the losses and consumer discretionary shares leading the gains.

At last check, the Dow Jones Industrial Average (DJI) was down 8.61 points at 8,021.01. The S&P 500 Index (SPX) gained 2.11 points to 854.17, while the technology-laden Nasdaq Composite (RIXF) added 15.7 points to stand at 1,642.5.