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Published in Print: July 14, 2004, as Education Inc.

Education Inc.

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Going Public

The educational software and services company Blackboard Inc. went public last month, and its initial public offering of $14 a share had surged by 43 percent, to $20.01 a share, by day’s end, raising $77 million.

Blackboard, which provides academic-learning software primarily to colleges but is aggressively expanding into the K-12 and overseas markets, agreed to sell more than 3.6 million shares. Its stockholders agreed to sell another 1.8 million shares.

Blackboard stock closed at $20.46 a share last Wednesday.

"They’re really well positioned now to expand their footprint," said Matthew Stein, a senior analyst at Eduventures Inc., a Boston-based research firm that tracks K-12 and higher education businesses.

Wall Street’s enthusiasm for the Washington-based Blackboard seemed to reflect the heady days before the tech bubble burst in 2000, when IPOs routinely generated hundreds of millions of dollars. Trading under the symbol BBBB, Blackboard posted the second-highest gains in its first day of trading among technology-company IPOs so far this year, according to New York City-based Thomson Financials, a financial data research firm.

However, what may be a little unusual in light of the IPO is that Blackboard Chairman Matthew S. Pittinsky and President Michael L. Chasen sold upwards of $1 million of their company’s stock before the company went public. Company founders do not often sell their stock before taking their company public. As a result, a handful of venture-capital investors control a bulk of the company’s shares.

The biggest investors include the Internet Capital Group, a Wayne, Pa.-based venture-capital firm, with a 12 percent share.

Over the past year, Blackboard’s revenues have grown by more than 30 percent, from $69.9 million to $92.5 million. The company also cuts its losses from $41.7 million in 2002 to $1.4 million last year.

"What will be interesting to see is whether or not someone will come along … and provide an equal if not better [software] platform with a lot less money," said Mr. Stein.

Rhea R. Borja

Vol. 23, Issue 42, Page 8

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