Rosetta Stone approaching bottom
While I have been relentlessly negative about Rosetta Stone from its IPO onward, even I am willing to concede we are starting to approach a bottom for RST. I closed my 11th red thumb of RST recently and I am not planning on re-opening to launch #12 yet, as the market has, it seems, fairly taken into account RST management's failure to execute. In yesterday's 4Q earnings press conference, RST management noted the major problems the business has and frankly noted the need to rapidly restructure and reinnovate to save the company's future.
With a loss of 40 cents a share or more coming up in Q1, the era of profitability and positive cash flow is clearly done for RST, but there still is a book value of $9 here, with $5 a share in cash. The brand is also worth something, obviously. While RST shares shouldn't be purchased here (my long-term target for their stock price is their book value), short positions probably should be covered. The stock is off 40% in just a couple of weeks and it appears the market finally has woken up to the issues I raised in my recent articles.