U.S. Markets closed

Rosetta Stone stock offering priced, shares fall

ARLINGTON, Va. (AP) -- Rosetta Stone Inc. said Thursday that a public offering of 3.5 million shares of common stock priced at $16 each.

The price represents a 6 percent discount to the foreign language education company's Wednesday closing stock price of $17.08.

Rosetta Stone shares dropped $1.77, or 10 percent, to $15.31 in midday trading. The stock is up nearly 24 percent in the year to date.

Investment funds ABS Capital Partners IV Trust and Norwest Equity Partners VIII LP — the company's two largest shareholders — are selling 3.49 million of the shares, while Rosetta Stone is selling 10,000 shares.

ABS and Norwest also granted the offering's underwriters — Robert W. Baird & Co. and William Blair & Co. — a 30-day option to buy up to an additional 525,000 shares.

Arlington, Va.-based Rosetta Stone said it plans to use the proceeds from its offering of 10,000 shares to pay for its fees and expenses related to the offering. The company will not receive any proceeds from the sale of the shares by ABS and Norwest.