Rosetta Stone Up 5%; New Investor Seeks Bigger Board

Rosetta Stone Inc. RST shares jumped more than 5 percent after an investment group disclosed it had acquired an 8 percent stake for about $18 million and urged the company's management to "tighten its focus." The investment group, D3 Family Funds acquires shares of micro-caps and said it had recommended a number of candidates to increase the size of Rosetta's board. D3 said it has been "in frequent contact with management" of the company which provides self-study language courses. It believes Rosetta is taking "too many initiatives simultaneously." As an example, D3 said "we find it difficult to believe all of the many product and pricing, distribution and channel initiatives the company is undertaking in North America are equally worth while." Rosetta has "enormous potential" but its share price reflects Street sentiment that the company is "wasting its assets," D3 said. Rosetta traded recently at $10.03 a share, up 4.7 percent.