Rosetta Stone Buyers Are Hard to Understand

The Stephanie Gross Trust, a trust related to Rosetta Stone (RST) board member Patrick Gross, purchased more than 32,000 shares of stock in the company on June 7 at an average price of $15.32 per share, according to a Form 4 filed with the Securities and Exchange Commission.

When insiders or their families to tie themselves more closely to a company in this way -- increasing company-specific risk, rather than diversifying their wealth -- this would generally be thought to be irrational unless the insider was more confident than usual in the company's prospects. In fact, studies show a small outperformance effect associated with insider purchases....515 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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