Rosetta Stone Hires Adviser to Explore Potential Sale

(Bloomberg) -- Rosetta Stone Inc. is exploring strategic alternatives including a potential sale of all or part of the language and literacy software company, according to people familiar with the matter.

The Arlington, Virginia-based company is working with financial advisers to gauge interest from potential private equity and strategic buyers, said the people, who asked not to be identified because the matter is private. Rosetta Stone has yet to determine what avenue to pursue, and the company may choose to remain independent, the people said.

Rosetta Stone rose 25% to $20.02 Friday in New York trading, giving the company a market value of about $492 million. The stock had fallen 33% in the past year through Thursday.

A representative for Rosetta Stone declined to comment.

The company is experiencing a boost in business during the coronavirus pandemic. It said in May that consumer language bookings grew 42% in the first quarter over the previous year and that literacy bookings were up 22%. It attributed the gains to disruptions in schooling and to people using their time during shelter-in-place orders to learn new languages.

In January, activist investor Voss Capital disclosed a position in Rosetta Stone and said it planned to talk to the board and management to push for changes, including a potential sale of the entire company or some of its business.

Travis Cocke, Voss Capital’s chief investment officer, said at a Bloomberg conference in February he believed the company could be worth about $35 a share in a sale.

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