NEW YORK (Reuters) – Bridgepoint Education Inc BPI.N shares were up 7 percent on Wednesday following the college operator’s initial public offering, which priced below expectations.
The shares opened at $10.50 on the New York Stock Exchange — the same level at which they priced in Tuesday’s IPO, or 30 percent below the midpoint of the deal’s estimate range — and rose as much as 11.1 percent before slipping back to $11.23 at midday.
San Diego-based Bridgepoint Education sold 13.5 million shares, raising $141.75 million in the IPO.
“Given the state of the market, investors will always be looking for a discount,” said Matt Therian, an analyst with Connecticut-based research firm Renaissance Capital.
“It shows that a deal can get done, if it is priced right,” he said.
The most recent college operator to go public, Grand Canyon Education Inc (LOPE.O), which made its debut in November, also had to lower its price estimate range and still saw its shares immediately tumble 16 percent in the open market before recovering to finish down 1 percent on their first day of trading.
The Grand Canyon shares have since rallied and are up about 21 percent over their $12 offer price.
The Bridgepoint IPO is the third in 2009. A fourth IPO, a $100 million deal by Rosetta Stone Inc (RST.N), is set to price Wednesday night and start trading Thursday.
Shares of the first two deals in 2009 — by infant formula maker Mead Johnson Nutrition Co (MJN.N) and Chinese video game maker Changyou.com Ltd (CYOU.O) — priced at the top of their ranges and rose 10 percent and 25 percent respectively in their debuts.
The Bridgepoint IPO’s underwriters, led by Credit Suisse (CSGN.VX) and JP Morgan (JPM.N), have the option to buy up to 2.025 million additional shares to cover overallotments.
(Reporting by Phil Wahba; Editing by Lisa Von Ahn and Brian Moss)