MSTR, interesting piece here
<<NewsTraders.com)-- Shares of MicroStrategy (MSTR) were rocked on Monday after the Internet software company said its financial results for the past two years would need to be restated in order to comply with the revised revenue recognition policies of the SEC.
The stock was recently seen changing hands at about $90, off from Friday's close of $226.75 by a whopping $136.75, representing a greater-than-60% haircut, on extremely heavy volume.
Though investors appear to be moving in droves out of their positions on this once-mighty Internet highflier, BB&T Capital Markets analyst Jon Moody is telling clients that although the stock's near-term direction is hazy, investors with longer time horizons should add to or establish positions.
"If you're a momentum player this isn't the place to be," said Moody, who believes MicroStrategy will need a quarter or two to rebuild themselves and their reputation with Wall Street.
Moody said that although he hasn't been able to speak directly with MicroStrategy's management today, he is maintaining a "long-term buy" recommendation and will rework his financial models to account for the revised financial data.
"Their base business is strong, the revenue base is still there," the analyst said, but he pointed out that investors were giving the stock a rich valuation based on price-to-sales ratios that are now severely compromised by the revised financials.
MicroStrategy, based in Vienna, Va., provides software that allows clients to build personal relations with their partners, supply-chains, and customers.
Of note, BB&T Capital Markets was formerly known as Scott & Stringfellow.>>
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