April 16 (Bloomberg) -- Rosetta Stone Inc., the maker of language-training software, soared in its first day of trading after raising more than expected in its initial public offering.

The stock jumped $7.12, or 40 percent, to $25.12 at 4 p.m. in New York Stock Exchange composite trading. Underwriters led by Morgan Stanley and William Blair & Co. priced the deal last night at $18 a share, more than the company’s projected range of $15 to $17.

Investors are optimistic that the IPO proceeds of about $50 million will help Rosetta expand beyond the U.S., said Francis Gaskins, editor of IPODesktop.com, a Web-based newsletter in Marina del Rey, California. Rosetta, which makes self-study CD- ROMs, is seeking a bigger slice of the $83 billion that people spend on post-college language training annually.

“We’re very excited about Rosetta,” Kathleen Smith, principal at Renaissance Capital Corp., said on Bloomberg Television. “It’s a very strong brand name, a fast-growing company and it’s unique.”

The Arlington, Virginia-based company has boosted sales more than 50 percent in each of the past two years and still gets more than 90 percent of its revenue in the U.S. Its profit increased fivefold last year to $13.9 million.

Rosetta will use part of the proceeds to expand outside the U.S., Chief Executive Officer Tom Adams said in a presentation to investors this month. The company also plans to supplement its product line with an online “socialization environment” to let customers practice their new languages, Adams said on Bloomberg Television today.

Rosetta’s shareholders include private-equity firms ABS Capital Partners and Norwest Equity Partners.

To contact the reporters on this story: Tim Mullaney in New York at tmullaney1@bloomberg.net

Last Updated: April 16, 2009 16:04 EDT