Ian Bezek • 24 Comments
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
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 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
Apr. 20, 2015, 3:12 PM
- With the Nasdaq up 1.3%, many tech companies are posting big gains, and only a few are seeing major losses.
- Notable gainers include audio codec chipmaker Cirrus Logic (CRUS +4%), gaming headset maker Turtle Beach (HEAR +11.4%), video processor developer Pixelworks (PXLW +6%), U.S. solar installer Vivint (VSLR +5.4%), CDN owner Limelight (LLNW +5.9%), cloud revenue management software firm ServiceSource (SREV +4.9%), language software firm Rosetta Stone (RST +4.6%), and storage hardware maker Quantum (QTM +5.3%).
- Notable decliners include craft goods marketplace/recent IPO Etsy (ETSY -8%) and touch sensor developer UniPixel (UNXL -12.2%).
- Cirrus, a major beneficiary of strong iPhone 6 sales, has made fresh 52-week highs; the company reports on April 28, a day after Apple. Beaten-down Turtle Beach is up 52% from an early April low of $1.85; new executive hires and product launches might be helping. Quantum (also making new 52-week highs) is up 38% since pre-announcing strong March quarter sales on April 9. Pixelworks reports on April 30.
- Etsy is now down 18% from last Thursday's post-IPO opening trade of $31.00, as investors balance strong growth and a fervently loyal user base with steep multiples; shares are still up 60% from their $16 IPO price. Likewise, UniPixel is down 18% since announcing a deal to buy Atmel's XSense touch sensor assets on Friday morning.
- Previously covered: Microsoft, Manhattan Associates, Ascent Solar, Check Point/FireEye, Rovi, FARO Technologies
Mar. 26, 2015, 2:53 PM
- Stephen Swad has resigned as Rosetta Stone's (NYSE:RST) CEO after three years on the job, as well as from the company's board. Director/ex-Goldman managing partner A. John Hass will serve as interim CEO while the board looks for a replacement.
- The announcement comes two weeks after the language software vendor announced (along with its Q4 results) it's cutting jobs and lowering its consumer product investments. Shares tumbled on account of Rosetta's light bookings and 2015 guidance.
Mar. 12, 2015, 10:22 AM
- Rosetta Stone (RST -12.9%) has nosedived after missing Q4 estimates and stating it's cutting its consumer product investments to focus on enterprise/education opportunities.
- On the CC (transcript), the company noted consumer bookings are expected to fall to $110M-$130M in 2015 from 2014's $196M, and will come in around ~$50M-$75M during the next few years. It also mentioned Q4 North American consumer bookings ($61.9M, +18% Y/Y) fell short of guidance of $64M-$69M, as price cuts dampened the impact of 34% unit growth.
Jun. 16, 2014, 11:57 AM
- 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."
Nov. 6, 2013, 5:06 PM
- SolarCity (SCTY) expects Q4 revenue of $40M-$46M ($22M-$24M in operating lease revenue, $18M-$22M in systems sale revenue) and EPS of -$0.55 to -$0.65 vs. a consensus of -$0.47. 101MW are expected to be deployed, a figure that meshes with existing full-year guidance of 278MW. 2014 guidance for 475MW-525MW in deployments has been reiterated. Shares -2.7% AH, giving back a small portion of the year's big gains. (Q3 results, PR)
- Giant Interactive (GA) expects Q4 revenue to "grow moderately" relative to a Q3 level of $96.4M. That suggests the company could miss a Q4 revenue consensus of $101.8M. Shares unchanged AH for now. (Q3 results, PR)
- Following a Q3 miss, Rosetta Stone (RST) expects 2013 revenue of $270M-$280M and EPS of -$0.12 to -$0.01, below a consensus of $286.5M and $0.01. The language software vendor blames "lower pricing and softness" in retail channels for its near-term issues. Shares -11.2% AH. (Q3 results, PR)
Jun. 6, 2013, 12:45 PM
Jun. 6, 2013, 9:10 AM
Jun. 5, 2013, 4:41 PM
Rosetta Stone (RST) announces a 3.5M share secondary offering. The selling stockholders, ABS Capital Partners IV Trust and Norwest Equity Partners VIII, LP, are offering 3,490,000 shares, with Rosetta Stone rounding it out with 10,000 shares. RST intends to use the net proceeds from its 10K shares to pay for the fees and expenses incurred in connection with the offering. The company will not receive any proceeds from the sale of the shares offered by the selling stockholders. Shares -1.6% AH.| Jun. 5, 2013, 4:41 PM
Nov. 8, 2012, 10:31 AM
Rosetta Stone (RST +19.1%) is doing the exact opposite of what it did 3 months ago, taking off after beating Q3 estimates and raising its 2012 adjusted EBITDA guidance to $8M-$10M from a prior $6M-$8M. International consumer and institutional sales respectively fell 8% and 6% Y/Y in Q3, but U.S. consumer rose 5%, and bookings growth of 9% exceeded flat revenue growth. Rosetta noted on its earnings call that its direct-to-consumer sales efforts in the U.S. are lifting bookings.| Nov. 8, 2012, 10:31 AM