Got a trade alert from PennyStock101 (org) on Friday morning and their pick went up 49% while the rest of the market was seeing red. I suggest everyone signup to their free newsletter they are releasing their next pick early next week! Google "PennyStock101"
The Freemium Language training is killing them, They are trying to move from a B2C model to a B2B model. The B2C model drives profits revenues. They recently realigned to provide the B2B model as the core segment for the serious learner.
Too Little too late. They cant manage China, they lack focus outside of the USA except for latin america. People are leaving and the future is Dim for this once great American Company.
I have a few shares as well. It reminds me of ADBL. Good name recognition, good customer base, decent revenues, but a lot of overhead and freemium competition. The overhead could be slashed to 20% of current levels with the right buyer and it could be a significant earnings play (well as significant as $240mm in revenue could be I suppose), but are any of the right buyers paying attention? I don't think most of them care about putting in the effort to make a $170mm co a $500mm-$750mm co.
Probably. Not a huge market for this company as it a commodity business model.
Their revenue numbers are quite good for the right buyer. Hypothetically a buyer with a lot of brand awareness (ie doesn't need to advertise as much) and a network (like FB) could buy RST and practically slash their SGA by 80% from $234mm to $50mm. They could also reduce their cost of revenue by 30% to $37mm. That could have them earning approx $50mm vs losing ($73mm). That would make RST worth 5-10x as much in the right hands.
Could FB, PCLN, EXPE, YHOO use a platform that links millions of people around the globe together? Probably. Could they give away language courses to "premium" members for free as opposed to charging. Easily. Are schools inundated with ESL cost in the US? of course. Could these large players use RST to gain in roads to the highly lucrative US education market? Probably. The only problem is there are other platforms which use a freemium model, and RST can't go that way.
So Osmium is betting they can probably get this company sold. They better, because they are burning cash way too fast. The problem is this is a drop in a big players bucket, so nobody is paying attention. A buyout would probably be no more than $12-14.