hooglextra.blogg.se

1. #ROSETTA STONE TOTALE 4.1.15 PRO#
2. #ROSETTA STONE TOTALE 4.1.15 SOFTWARE#
3. #ROSETTA STONE TOTALE 4.1.15 FREE#

The idea is that Rosetta's recent acquisitions have expanded and diversified its business, but it's been buying the wrong companies. Sales of the core Rosetta Stone CD-ROM have been the biggest sufferer. Rosetta is now one of many language and educational tools available to consumers, many of which are free.Īnd despite its heavy marketing spending, Rosetta has seen its revenue decline by 2% so far in 2014. Outside of the questionable management decisions, Rosetta might be struggling a little from competition. The best bet is to use its cash to fund a buyback program. Recent acquisitions of companies such as Vivity, Tell Me More and LiveMocha have drained cash off the balance sheet and added several layers of complexity to the business. This starts with improved financial reporting and providing clear disclosures and appropriate business metrics.Īs well, both funds want Rosetta to clean up its balance sheet and focus its business by holding off on acquisitions until it has developed a new strategy.

#ROSETTA STONE TOTALE 4.1.15 FREE#

Osmium has also taken a bigger-picture view and asked the company to articulate a long-term strategy for doubling free cash flow margins and returning to growth. However, it's clear that both funds think spending can decrease more. Nierenberg referred to this type of marketing as "low-calorie" expenditures, and commended the company for cutting back. The company's historically had an affinity for expensively produced videos and heavy cable and radio advertising. Nierenberg has said "We fear that Rosetta's 'initiative overload' may be causing sub-optimal execution and impairing free cash flow."īoth funds have pointed out Rosetta's excessive marketing, research and development spending. It's asking Rosetta to focus on just the one thing it can do to maximize free cash flow.

The hedge fund singled out Rosetta's North American Consumer business as having too many initiatives going on in terms of products, pricing and distribution.

The company's big appetite for doing everything for every consumer has been impairing free cash flow generation. At the time, it said Rosetta needed to narrow its focus and strategy. Although the $130mm Osmium Partners fund is small, Rosetta is Osmium's largest position and it owns nearly 10% of the company. Osmium joined Nierenberg in August, and the two have similar goals. Between the two of them, John Lewis' Osmium Partners and David Nierenberg's Nierenberg Investment Management, they own nearly 18%. Rosetta Stone is a busted turnaround story with vast downside as the company continues to squander what remains of its formerly solid balance sheet on frivolous acquisitions and ineffectual new product launches and marketing strategies.Įnter two activist hedge funds that think they have the answer.

#ROSETTA STONE TOTALE 4.1.15 PRO#

I believe that management has lost a significant amount of credibility due to its highly questionable financial reporting practices Unless management takes dramatic action, the Company will likely continue to struggle to maintain its market share Thus, I would recommend initiating a short position or selling shares if you are an existing RST shareholder.Īnd as Ian Bezek argued in another Seeking Alpha PRO piece, investors hoping for a turnaround in Rosetta's business shouldn't expect one anytime soon: As Jay Yoon noted in a recent Seeking Alpha PRO article:įrankly, I am shocked that RST has not yet been called out for its misleading definition of Adjusted EBITDA. There are a lot of problems, including questionable management decisions and financial reporting. There's clearly something in need of repair. The stock is down 20% in 2014 and nearly 50% over the last five years.

#ROSETTA STONE TOTALE 4.1.15 SOFTWARE#

Educational software company Rosetta Stone ( NYSE: RST) has been struggling for a while.