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Robbins Geller Rudman & Dowd LLP Files Class Action Suit against Rosetta Stone, Inc.

^{Published on 2011-03-24 15:10:47 - Market Wire}
 

NEW YORK--([ BUSINESS WIRE ])--Robbins Geller Rudman & Dowd LLP (aRobbins Gellera) ([ http://www.rgrdlaw.com/cases/rosettastone/ ]) today announced that a class action has been commenced on behalf of an institutional investor in the United States District Court for the Eastern District of Virginia on behalf of purchasers of Rosetta Stone, Inc. (aRosetta Stonea or the aCompanya) (NYSE:RST) common stock between February 25, 2010 and March 1, 2011, inclusive (the aClass Perioda), seeking to pursue remedies under the Securities Exchange Act of 1934 (the aExchange Acta).

If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiffa™s counsel, Samuel H. Rudman or David A. Rosenfeld of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at [ djr@rgrdlaw.com ]. If you are a member of this Class, you can view a copy of the complaint as filed or join this class action online at [ http://www.rgrdlaw.com/cases/rosettastone/ ]. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

The complaint charges Rosetta Stone and certain of its officers and/or directors with violations of the Exchange Act. Rosetta Stone develops, markets, and sells language learning solutions in approximately 31 languages worldwide and maintains its corporate headquarters in Arlington, Virginia.

The complaint alleges that, throughout the Class Period, defendants failed to disclose material adverse facts about the Companya™s true financial condition, business and prospects. Specifically, the complaint alleges: (a) that Rosetta Stone was facing intense competition for its products during the Class Period, including free competitive product offerings; (b) that the free and lower priced competitive product offerings, not a temporary reduction in advertising, was having a material adverse effect on the Companya™s Class Period revenues, particularly U.S. consumer revenues; (c) that the favorable sales booking numbers Rosetta Stone reported during the Class Period was the result of key retail partners maintaining inventory of the Companya™s products well above historic levels; (d) that Rosetta Stonea™s reported sales bookings and revenues during the Class Period were the product of manipulation; and (e) that, based on the foregoing, defendants lacked a reasonable basis for their positive statements about Rosetta Stonea™s revenues, sales bookings, unit volume, new product introductions and advertising.

On February 28, 2010, the last day of the Class Period, Rosetta Stone issued a press release announcing its results for the fourth quarter and year ended December 31, 2010. For the quarter, the Company reported revenue of $74.3 million, a 5% decrease from the prior year period, net income on a Generally Accepted Accounting Principles basis of $5.0 million, or $0.23 per share, a decrease of 60% from the 2009 fourth quarter. On this news, shares of the Companya™s stock fell $1.77 per share, or almost 12%, to close at $13.19 per share, on extremely heavy trading volume.

Plaintiff seeks to recover damages on behalf of all purchasers of Rosetta Stonea™s common stock during the Class Period (the aClassa). The plaintiff is represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.

Robbins Geller, a 180-lawyer firm with offices in San Diego, San Francisco, New York, Boca Raton, Washington, D.C., Philadelphia and Atlanta, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. The Robbins Geller Web site ([ http://www.rgrdlaw.com ]) has more information about the firm.