Rosetta Stone spikes; activist discloses 8% stake, calls for changes

Nierenberg Investment has disclosed a 1.7M-share (8%) stake in Rosetta Stone (RST +4.8%), and is calling for actions it thinks "could help tighten the company’s strategic focus and substantially improve its free cash flow."

The firm thinks Rosetta is "undertaking too many initiatives simultaneously," and is skeptical "all of the many product, pricing, distribution, and channel initiatives being pursued in RST’s North American consumer (NAC) business are equally worthy."

Nierenberg also argues Rosetta's board is too small (it currently has 6 members), and "should evolve into a 'post-venture' board which possesses relevant digital marketing expertise and customer/end-user domain experience consistent with RST’s tightened strategic focus."

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