If you’ve ever tried picking up a language on your own, then you’ve probably heard of Rosetta Stone Inc. (NYSE: RST).
Founded in 1992 in the Shenandoah Valley, Virgina, the company grew quickly into an internationally recognized name with offices all around the world. With millions of customers in 150 different countries to its credit, Rosetta Stone is the leading language-learning software you can buy.
The thing is that these people know their market, and they know it well, right down to the more obscure but still profitable subdivisions.
Just visit their website http://www.rosettastone.com/ and you’ll see what I mean. As soon as you’ve accessed it, you can choose between three main tabs - and numerous other options below - marked Personal, Organizations (business, non profits, government), and Schools (primary, secondary, adult education, universities & colleges, homeschool).
That last subcategory for homeschoolers is what makes me think they can continue to own this particular market. Despite stereotypes out there, the alternative education choice is growing significantly every year. Yet it’s a market that is largely ignored by many non-religiously affiliated companies, even though homeschooling is something that has spread well beyond the conservative Christian community.
Rosetta, however, is clearly on top of its game in that department… and seems to be doing just fine in everything else too. “Large institutions, companies and government agencies will have more trust in a publicly listed company and that will help business,” says CEO Tom Adams. “It elevates out profile. We have a dominant brand and this will strengthen it.”
That dominance already racked in 2008 revenues of $209.4 million, 52% more than 2007 saw. Net income last year was $13.9 million.
In a market starved for something positive, Rosetta is a beacon, one that investors flocked to like wayward sailors on sinking ships. So while it set its IPO at $18, shares quickly shot up as far as $26.27 in initial trading today, though it finished at $25.12.
All told, Rosetta’s debut to the market was a significant success, with a bright future ahead of it
Thursday, April 16, 2009 - by Jeannette Di Louie, Assistant Editor, Mt. Vernon Research.
