Rosetta Stone IPO First Day

Rosetta Stone (RST) had its opening day on the NYSE and it was a big one. One of the best IPOs in a long time. Why?

They are in a good market - the language learning market is fairly hot and it's growing.

It's at the right time - I know, everyone speaks English so there's no need to learn another language. Well ... when the whole crowd is thinking one way, it might be time to start looking in the other direction. You need every edge to compete and having command of at least one other language can help you do that.

Brand recognition - Rosetta Stone has it like nobody else.

Reliable and growing US sales but they are expanding aggressively into the global market. This is where they can see some really good growth for the next few years.

So, long-term prospects for the stock appear to be good. I'm not trying to rewrite history here. I thought they were crazy to do an IPO now and I said as much. I couldn't tell you why it worked so well for them.

Rosetta Stone IPO

While doing some investment research, I came across a filing by none other than Rosetta Stone. Apparently they are looking to go public. The process could take several months so I don't think a Rosetta Stone stock is imminent just yet. This does shed some light on some of Rosetta Stones actions in recent months - pulling software out of public libraries, high profile projects like the Michael Phelps commercial etc. I guess they are gearing up for their IPO.

But, it seems like a strange time for an IPO. The IPO market is dry as a bone and it's a terrible investing climate. Not to mention strange timing for Rosetta Stone itself. They state right in their filing that a large percentage of their sales come during the holiday season. This is expected to be one of the weakest holiday seasons in decades. It's a little risky right now. They are in the right market and have the right products for long-term growth, but keep a close eye on this before you buy.