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Tickers in this Article: RST, BPI, CYOU, MJN, BMY, EBAY, LOPE
After a virtual freeze in the IPO market at the end of 2008, recent activity indicates that a gradual thawing may be in store.

Taken to School
With unemployment figures continuing to rise, education-related services have garnered an increasing amount of attention. This interest opened the door for a couple of IPOs last week, in what has otherwise been a lackluster IPO market. Rosetta Stone (NYSE: RST) raised $112.5 million in the Arlington-based company's initial public offering. On Thursday, investors embraced the opportunity and sent shares soaring up nearly 40% on the stock's first day of trading. (If you need a quick refresher, see IPO Basics: What Is An IPO?.)

The banner day for Rosetta Stone was preceded by an IPO from Bridgepoint Education (NYSE: BPI) on Wednesday. Bridgepoint wasn't as fortunate; its shares closed up 5.7% on its first day of trading, but the offering priced 30% below the middle of its anticipated range.

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Child's Play
Rosetta Stone and Bridgepoint investors were emboldened by two other notable successes in the IPO arena in 2009. The Chinese online game developer, Changyou.com (Nasdaq: CYOU) saw its shares rally 25% on its first day of trading earlier this month. And the baby formula manufacturer, Mead Johnson Nutrition (NYSE: MJN), which was spun off by Bristol-Myers Squibb (NYSE: BMY) in February, closed 10% above its pricing the day that it became the first company in the U.S. to go public since Grand Canyon Education (Nasdaq: LOPE) held its IPO in November.


The gap between the Grand Canyon and Mead Johnson IPOs was the second longest slump on record, according to Dealogic. Even following this recent pickup in activity, don't expect a flurry of new offerings right away. Many companies would rather wait until the current economic landscape begins to really turn around before forging ahead with an IPO. One such company that is hoping for a recovery sooner rather than later is EBay (Nasdaq: EBAY). The online merchant has already said that it will be looking to spin off Skype in an IPO - only not until the first half of 2010.

The Bottom Line
So, maybe the IPO market isn't going to be experiencing a flashback to 1999 anytime soon. However, the recent activity in the space does suggest that some companies are beginning to show a willingness to take their operations public, despite looming economic uncertainties. The months ahead will tell the story as to whether the first quarter of 2009 was the turning point for the IPO market, or just a flash in the pan. (For further reading, see The Murky Waters Of The IPO Market and The IPO Basics Tutorial.)

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