UPDATE 4-Bridgepoint Education ends first day up 5.7 pct

Wed Apr 15, 2009 4:44pm EDT

* Third IPO in a row to have a first day "pop"

* Gains as much as 11.1 pct before receding (Adds final share price of day, details on first day performance)

By Phil Wahba

NEW YORK, April 15 (Reuters) - Bridgepoint Education Inc (BPI.N) shares finished their first day of trading on Wednesday up 5.7 percent, 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 closing at $11.10.

Its debut performance made Bridgepoint's IPO the third in a row to see a first day "pop," or price jump.

San Diego-based Bridgepoint Education sold 13.5 million shares, raising $141.75 million in the IPO, the third on a U.S. exchange this year.

"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."

Bridgepoint, owned primarily by Warburg Pincus, also ended the stock market's longest-ever span without a venture-capital backed IPO, according to Thomson Reuters data. The last venture-backed deal to go public was by technology company Rackspace Hosting Inc (RAX.N) last August.

In a statement Wednesday, Bridgepoint said 74 percent of the shares sold in the IPO were offered by selling stockholders. In its last regulatory filing prior to the IPO, Bridgepoint had said that figure would be 81 percent.

A Bridgepoint spokeswoman declined to comment.

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, finishing 1 percent lower on their first day of trading.

The Grand Canyon shares have since rallied and were up about 22 percent on Wednesday 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 on Thursday.

The 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 Group AG (CSGN.VX) and JP Morgan & Co (JPM.N), have the option to buy up to 2.025 million additional shares to cover over allotments. (Reporting by Phil Wahba; Editing by Brian Moss and Andre Grenon)

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