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 For companies dreaming about going public, this week provided something to get excited about, finally. Two initial public offerings priced, making April the busiest month since August 2008 for stock debuts. Yesterday, language learning software developer Rosetta Stone Inc. (NYSE:RST) shares climbed about 40% to close at $25.12 on their first day of trading after pricing above their range Wednesday. Yesterday, online college Bridgepoint Education Inc. (NYSE:BPI) debuted at $10.50 per share, its IPO price, which fell below its expected $14 to $16 range. But shares ended trading Wednesday at $11.10.In the other 2008 debuts, Chinese online video game company Changyou.com Ltd. went public earlier this month and infant formula maker Mead Johnson Nutrition Co. went public in February. Both companies priced at the top of their respective ranges. Three of the four new listings this year are trading on the NYSE (Changyou.com debuted on the Nasdaq), which is giving Scott Cutler (pictured) something to get excited about too. As the exchange's executive vice president in charge of listings in the Americas, Cutler manages relationships with listed companies as well as the NYSE's products, including IPOs. He's also responsible for the exchange's relationship with the Investment Banking, Private Equity, Venture Capital, and Legal Communities. We spoke with Cutler Thursday, a few hours after Rosetta Stone began trading. -- Olaf de Senerpont Domis Dealscape: What do the successful debuts of Bridgepoint and Rosetta Stone mean for the IPO window? Scott Cutler: The window never closed. It is always open to those willing to accept the valuations that are provided. This week's IPOs provide two good data points that lay a foundation for the future. Both companies are in growing markets, both had executed well, and were market leaders in their spaces. Those three conditions are prerequisites for anything that is going to come to market. It's definitely rarified air -- there aren't hundreds of companies that can meet even two of those three conditions. In both the transactions this week, there's a shift on the buy side. These companies saw on their road shows many more long-term oriented investors. Many of the hedge funds are gone. How important is pure sentiment to the IPO market, rather than pure financial performance? The markets right now are driven on sentiment. It's an emotional market place; there's a herd mentality to it. If these IPOs didn't perform well, it would be very difficult for the next IPO to go out there and say "I will deliver." From an investor's point of view, the fact that investors have already made money on these deals will generate more desire for this product. It feeds on itself. How did the dismal 2008 for IPOs affect NYSE? We don't create the IPO market, we just respond to it and create a platform for it to exist. Last year was actually pretty good. The Visa transaction was a huge success. [Credit card giant Visa Inc. went public in March 2008 in a $17.9 billion IPO, the largest U.S. initial public offering ever] We've been around for a long time; we're here for the cycle. Both of this week's deals were in technology, which is generally Nasdaq territory. Why didn't Bridgepoint and Rosetta Stone turn to your rival? Our last deal before Mead Johnson was Rackspace [Inc., a Web hosting company that went public in August 2008], too. We've raised more in tech proceeds over the last couple years than the Nasdaq, which is a very big shift. It's probably a result of the fact that companies that are launching into the marketplace like the global association they get with the NYSE. They like to communicate that they are meeting the highest listing standards. (Pipeline subscribers can find more about this week's IPOs here.)
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