Why Rosetta Stone Shares Got Crushed

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of language-software maker Rosetta Stone (NYSE: RST  ) got crushed today, down by as much as 12% after the company reported first-quarter earnings and filed a mixed shelf registration.

So what: Revenue in the first quarter came in at $63.9 million, slightly below the consensus estimate of $64.5 million. That translated into an adjusted loss of $0.03 per share, which was better than the $0.08 per share loss that investors were expecting. Rosetta Stone reaffirmed full-year guidance, with revenue expected in the range of $280 million to $290 million.

Now what: The company also filed a mixed shelf securities registration, which allows it to sell up to $150 million of various types of securities. This includes senior debt securities, subordinated debt securities, and common or preferred stock, among others. The offering allows two large institutional shareholders to dump their entire positions. ABS Capital Partners and Norwest Equity Partners are offering all of their combined 8.4 million shares.

Interested in more info on Rosetta Stone? Add it to your watchlist by clicking here.

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9/26/2016 9:50 AM
RST $8.03 Down -0.17 -2.07%
Rosetta Stone CAPS Rating: *