A note sent to CNBC Squawk Box this AM:
Dear Sirs:
On 6/5/00 you dutifully reported that Wit Soundview (David DuChene dduchene@soundview.com) cut revenue estimates on Manugistics based on MANU not closing a (rumored) government contract before the end of the quarter. How could an undisclosed contract be a part of the revenue guidance?
Manugistics Group (Nasdaq:MANU - news)
Shares are off 7 at 27 7/8. Wit SoundView cut its fiscal year 2001 and 2002 revenue estimates for the e-business solutions provider. The estimate for 2001 was cut to $197.6 million from $208.4 million and the revenue estimate for 2002 was cut to $263.7 million from $277.3 million.
Wit SoundView maintained its ``buy'' rating on the company. Manugistics was reiterated a ``strong buy'' at Banc of America Securities. (http://biz.yahoo.com/wi/000605/7416.html)
On 6/5/2000, MANU traded 3,571,500 shares (10 times normal volume), down 5.125k (previous day's close 34.875); a low of 22.812 was hit on 6/7/2000. MANU refused to answer investors' questions, citing the company was in quiet period, but they did have a news release announcing a new A&P contract (http://biz.yahoo.com/prnews/000607/md_manugis.html). In addition, Prudential voiced support for stock allowing some recovery of price. Another 3,076,500 shares were traded 6/7/2000. The stock fell to a low of 22 1/2 on the day of earnings (062100). They subsequently have released their earnings of (.04), meeting the Street's expectations.
It appears that small investors have again been injured. I believe the trading of Wit Soundview and clients should be investigated. They picked a vulnerable company at a vulnerable time (pre-earnings quiet period) and caused a 35% drop in this stock's value on erroneous information. The CEO, Greg Owens, specifically answered a question in the conference call regarding the "government contract" saying that this was never a part of earnings guidance, calling it a "mis-communication".
CNBC could report the details of this unjust revenue reduction, the subsequent 35% loss of market cap, the meeting of current estimates and the company's disavowal of rumored contracts guiding revenue estimates. |
