Don't Buy Rosetta Stone Until It Can Translate Cost Cuts Into Cash Flow
Rosetta Stone's Terminal Decline Continues Despite Acquisitions And Accounting Changes
Ian Bezek • 24 Comments
Ian Bezek • 24 Comments
Wed, May 4, 4:54 PM
Tue, May 3, 5:35 PM
- AGO, ALDW, ALIM, ALJ, ALL, ANDE, ARCW, AREX, ARRS, ATO, AUY, AWK, AWR, BNFT, BREW, BRKR, CB, CBPO, CCRN, CDI, CECO, CENT, CF, CLR, CODI, CONE, CPE, CPSI, CSII, CSOD, CTL, CTLT, CUZ, CW, CWST, CXO, CXW, DAC, DOX, DPM, DVA, ECR, EPM, EQC, EQIX, ES, ETE, ETP, EXEL, FEIC, FICO, FIT, FLT, FLTX, FNV, FOXA, FRPT, FRSH, FRT, GDDY, GDOT, GHDX, GIL, GPOR, GTY, HABT, HASI, HDP, HIL, HIVE, HOS, HR, HRTG, HUBS, IAC, INFI, IO, IRG, JONE, KHC, KND, KONA, KTOS, KW, LGCY, LHCG, LNC, LNT, LPI, LPSN, LXU, MAA, MASI, MATX, MCHP, MCK, MED, MET, MHLD, MNR, MRO, MTRX, MTW, MUR, NCMI, NLY, NVAX, OHI, OME, ORA, OREX, OSUR, PAA, PAGP, PDLI, PE, PEIX, PHH, PNNT, PRI, PRU, QRVO, QUIK, RICE, RIG, RLJ, RLYP, RP, RRTS, RST, RYN, SBY, SKUL, SQNM, SRC, SUN, SWM, SXL, SZYM, TASR, TCAP, TEAR, THG, TLLP, TPC, TPUB, TRIP, TROX, TSLA, TSLX, TSO, TWO, VECO, VNDA, VRNS, WBMD, WFM, WFT, WGL, WMB, WMGI, WPG, WPX, WTI, WTS, WTW, XEC, XOXO, YUME, ZNGA
Mon, Mar. 14, 4:22 PM
Sun, Mar. 13, 5:35 PM
Fri, Jan. 22, 3:05 PM
- A partner at major Rosetta Stone (NYSE:RST) shareholder Roumell Asset Management (~5% stake) says the company may sell its Fit Brains "brain fitness" app unit as part of its efforts de-emphasize consumer products in favor of corporate and education market offerings. Shares spiked higher following the news.
- The partner adds Rosetta will probably wait to sell Fit Brains until fellow brain game maker Lumos Labs goes public or is acquired, thus helping to set a sale price for Fit Brains. Last May, Rosetta stated Fit Brains' revenue had doubled since Rosetta bought the company, reaching $4M/year.
- Rosetta bought Fit Brains for $12M in late 2013. The language software firm is 10 months removed from stating it's cutting consumer investments and carrying out layoffs. Q4 results are expected in the coming weeks.
Nov. 5, 2015, 3:26 PM
- With the help of low expectations, Rosetta Stone (NYSE:RST) has jumped after soundly beating Q3 EPS estimates and missing on revenue. A 26% Y/Y drop in operating expenses to $17.5M - the result of Rosetta's decision to pare consumer product investments - boosted EPS.
- The language software vendor's 23% Y/Y revenue decline stems from a 42% drop in consumer revenue to $24.5M. Enterprise/education revenue rose 12% to $25.3M, aided by 103% growth for the Lexia reading software platform.
- The U.S. accounted for 82% of Q3 revenue. The deferred revenue balance has risen by $11.2M this year to $139.4M.
- Q3 results, PR
Nov. 4, 2015, 4:32 PM
- Rosetta Stone (NYSE:RST): Q3 EPS of -$0.34 beats by $0.27.
- Revenue of $49.8M (-22.8% Y/Y) misses by $1.8M.
Nov. 3, 2015, 5:35 PM
- ACAS, ACLS, ACXM, AEL, AHT, ALB, ALR, ANDE, ARC, AREX, ARPI, ATO, AVG, AWAY, AWK, BGC, BKCC, BKD, BNFT, BOJA, BREW, BRKR, BWXT, CAA, CBPX, CCRN, CDI, CDXS, CF, CJES, CLR, CNAT, CODI, COHR, CPE, CSC, CSGS, CSII, CSLT, CTL, CVG, CVT, CXO, CXW, DCO, DOOR, DPM, DXCM, DYN, EGAN, ENVA, EOX, EPAM, EPM, EQC, ETE, ETP, EVAR, EVTC, EXAM, FB, FC, FEYE, FLT, FOE, FPRX, FRSH, FRT, FTD, FUEL, G, GDDY, GPOR, GTY, GUID, HABT, HASI, HDP, HIVE, HOLX, HR, HRTG, HUBS, IL, IO, JKHY, JONE, JRVR, KAI, KAR, KIM, KING, KND, KW, LADR, LCI, LDRH, LGCY, LHCG, LPSN, MATX, MB, MBI, MCHP, MCHX, MELI, MET, MHLD, MITT, MNTX, MOSY, MRIN, MRO, MTDR, MTRX, MUSA, MWA, MYRG, NLY, NNBR, NOG, NP, NWPX, OME, OSUR, PDLI, PE, PEIX, PFMT, PFSI, PGTI, PHH, PMT, POWR, PRA, PRI, PRU, PSEC, QCOM, QUOT, RDEN, RENT, RGR, RIG, RIGP, RJET, RLJ, RNR, RST, SBAC, SBY, SCSS, SD, SF, SGM, SLF, SPPI, SQNM, STR, SUN, SWM, SXL, TCAP, TEP, TROX, TS, TSE, TUMI, TWO, TXMD, UHAL, VEC, VVUS, WFM, WMGI, WPX, WRK, WSR, WTI, XENT, XNPT, XPO
Aug. 5, 2015, 4:12 PM
- Rosetta Stone (NYSE:RST): Q2 EPS of -$0.38 misses by $0.05.
- Revenue of $51.4M (-10.3% Y/Y) beats by $6.27M.
Jul. 7, 2015, 4:17 PM
- Rosetta Stone (NYSE:RST) has hired "outside financial and legal advisors to assist management and its Board with their ongoing comprehensive review to analyze potential options to improve financial performance and enhance shareholder value."
- The language software vendor received a buyout offer from RDG Capital in May. The next month, activist Osmium Partners (9.7% stake) called for a sale, while arguing a major buyout premium is possible.
Jun. 8, 2015, 12:10 PM
- Rosetta Stone's (NYSE:RST) shares "could transact to a strategic buyer at a price of $16 per share or better," argues #2 shareholder Osmium Partners (9.7% stake) in an open letter.
- Osmium thinks Disney, Houghton Mifflin, Pearson, or InterActive Corp. (among others) could potentially bid, and that Rosetta's Enterprise & Education (E&E) software ops are especially appealing, owing to their high margins, 80%+ annual renewal rate, and 100% reliance on SaaS/subscription-based revenue. Major cross-selling opportunities are seen for strategic acquirers looking to offer Rosetta's language software to education clients.
- Rosetta jumped two weeks ago after Mergermarket reported P-E investors had made a $9-$10/share offer to buy the company. Soon afterwards, Rosetta confirmed it had received an offer, and said it would "carefully evaluate" it.
May 29, 2015, 12:46 PM
May 29, 2015, 9:39 AM
- Following a Thursday afternoon Mergermarket report stating the company has received a buyout offer in the $9-$10/share range, Rosetta Stone (NYSE:RST) says its board "has received an expression of interest from RDG Capital Fund Management," and that it will "carefully evaluate" the proposal.
- Rosetta, which traded above $10 as recently as early March, reiterates it's "actively implementing its strategic plan, which it believes will deliver attractive value for shareholders."
May 28, 2015, 6:31 PM
- Mergermarket reports a group of P-E investors have offered to buy Rosetta Stone (NYSE:RST) for $9-$10/share. The language software vendor has jumped to $7.07 in AH trading.
- The rumored buyout price range is still well below the levels Rosetta traded at two years ago. Mergermarket's report comes two months after CEO Stephen Swad resigned, and was replaced on an interim basis by director/ex-Goldman partner A. John Hass.
May 6, 2015, 4:16 PM
- Rosetta Stone (NYSE:RST): Q1 EPS of -$0.95 may not be comparable to consensus of -$0.69.
- Revenue of $58.45M (-3.8% Y/Y) beats by $14.37M.
May 5, 2015, 3:29 PM
- With the Nasdaq down 1.4%, major tech decliners are easily outnumbering major gainers.
- Notable decliners include carrier/enterprise Wi-Fi hardware vendor Ruckus (RKUS -5.6%), IP licensing firm Acacia (ACTG -4.9%), VoIP/unified communications software vendor BroadSoft (BSFT -8.4%), LED/chip equipment maker Veeco (VECO -4.6%), language software vendor Rosetta Stone (RST -8.5%) mortgage origination software vendor Ellie Mae (ELLI -5.6%), and online video hosting platform Brightcove (BCOV -8.4%).
- Veeco has been hit by a downgrade to Outperform from Buy by CLSA; its Q1 report arrives tomorrow. Ruckus and Brightcove are adding to last week's post-earnings losses (I, II), while Acacia and Ellie Mae are giving back some of their recent post-earnings gains (I, II). BroadSoft soared yesterday after beating Q1 estimates and slightly hiking its 2015 EPS guidance.
- Previously covered: Chinese Internet stocks, cybersecurity stocks, LendingClub, Allot, Kulicke & Soffa, InterCloud, MicroVision
- Notable gainers: Salesforce, RetailMeNot, ChannelAdvisor, A10 Networks, IDT
Rosetta Stone, Inc. provides technology based language learning solutions. It develops, markets and sells language learning solutions consisting of software products, online services and audio practice tools under the Rosetta Stone brand. The company's software products are sold on a direct... More
Industry: Multimedia & Graphics Software
Country: United States
Other News & PR