From Briefing.com
12:00 ET ******
i2 Technologies (ITWO) 176 3/16 -10 7/8: When a stock doubles in the period of three months, you can expect the first piece of negative news to cause a sharp sell-off. Such is the case today with ITWO shares. On Friday it was reported that The Alliance (ITWO, IBM and ARBA) lost Global Health Care Exchange as a customer. The Global Health Care Exchange instead chose CentriMed, a private company that was 47% owned by Internet Capital Group (ICGE) until Thursday when Global Health Care Exchange purchased ICGE's stake for $15.2 mln in cash up front and an additional $15.5 mln contigent on meeting performance goals. The Global Health Care Exchange was a key exchange for the Alliance as it was their first major announced exchange win and is comprised of five of the largest global health care companies: Johnson & Johnson (JNJ), GE Medical Systems (a GE co.), Baxter International (BAX), Abbott Labs (ABT), and Medtronic (MDT). Global Health Care Exchange said it chose CentriMed for their technology infrastructure, experienced health care professionals and management expertise. The fact that ICGE paid about $8 mln for their stake in CentriMed earlier this year and then turned it around for possibly as much as $30 mln, speaks volumes for the potential of the exchange. As for ITWO, as if they needed more bad news, their head of Technology Sales just left the company to join a private firm. While these two news items don't spell doom for ITWO, we would expect some continued near-term pressure on the shares after the incredible run the stock has had of late. However, long-term, the opportunities for ITWO's TradeMatrix are unlimited and can be utilized to increase process efficiencies such as supply chain management, scheduling, sourcing, manufacturing and forecasting in any number of industries. ITWO's valuation has gotten ahead of itself, but Street analysts are expecting strong numbers when they report September quarter results ($283 mln revs, $0.10 EPS), and that could be the next positive catalyst for the shares. - Matt Gould, Briefing.com |
