Bridgepoint IPO gets a lukewarm reception
- Share via
San Diego-based higher education company Bridgepoint Education Inc. faced a tough investor crowd when the firm floated its initial public stock offering late Tuesday.
The company sold 13.5 million shares at $10.50 each -- far below the $14 to $16 a share it had hoped to fetch. The stock begins trading today.
Bridgepoint, founded in 2004, offers associate’s, bachelor’s, master’s and doctoral programs in business, education, psychology, social sciences and health sciences. The firm has two campuses, Ashford University in Iowa and University of the Rockies in Colorado, but 98% of its 31,000 students are enrolled online.
The company’s revenue and profit have grown rapidly over the last few years. Bridgepoint earned $26.4 million in 2008 on revenue of $218 million.
But shares of several Bridgepoint rivals have been under pressure on concerns about the industry’s growth outlook. DeVry Inc. shares are off 26% this year, Apollo Group is down 18% and Grand Canyon Education is off 22%.
An issue for Bridgepoint may have been that most of the stock sale won’t benefit the firm directly: The company’s investors sold 81% of the shares in the IPO. Bridgepoint sold the rest, raising about $27 million, part of which is designated to pay off preferred stock.
Still, Bridgepoint is just the third IPO completed this year. The market for new issues was virtually paralyzed in January and February.
--
