I'm sure you're not the only one suspicious of comments from management right now.
About the "two deals just closed", was that a smoke screen on the management part or was it the true reason?
The true reason if you believe management.
First, can two deals swing that much revenue short fall?
Yes if you believe management.
------------------------------------------------------------------
Verity Inc. (VRTY) 49: Shares of provider of enterprise and Internet
knowledge retrieval solutions are expected to be subject to severe downward
pressure this morning after the company delivered less than projected fiscal Q2
results. According to the company, it earned $0.09 per share, three cents below
the First Call mean, and half the amount earned in the year-ago period. Also, in
fiscal Q1, VRTY earned $0.32 per share. Already on Instinet, shares of VRTY
are trading as much as 25 points below yesterday's closing price after the stock
fell 5 points yesterday ahead of its quarterly results. The issue behind the price
drop this morning seems to stem from revenues only expanding by 10% in the
least period to $16.7 million due to delays in closing three large transactions.
However, the company did say that the transactions that did not close in the
latest quarter reported did close afterwards and Verity does not anticipate having
problems closing in the third deal. Certainly, investors hate uncertainty, but they
appear to be overreacting to the news of the revenue shortfall in the latest
quarter, especially since Verity did experienced significant sales activity in key
markets even with the delays in closing. To be sure, the stock has performed
exceptionally during the past three months, more than doubling in price since
early August. And while a pullback in price is not unusual after such a rapid
advance, we suspect that investors are getting carried away in cutting the price so
drastically this morning. Possibly, when the dust settles, shares of Verity will
again look attractive. However, investor interest is not likely to return until the
company can show that its rapid growth has resumed. - RN
briefing.com |
