CPTH ($9...yes $9!!) price halved with surprise loss
(UPDATE: Updates with closing prices)
NEW YORK, Jan 19 (Reuters) - Critical Path Inc. (NasdaqNM:CPTH - news) shares plunged 55 percent by the close on Friday, hit by a surprise fourth-quarter loss from the Internet e-mail software provider.
As analysts downgraded the stock, Critical Path fell $11 to close at $9 on the Nasdaq market. The stock was the Nasdaq's top percentage decliner as 36.7 million of its shares exchanged hands setting an all-time record volume.
Earlier, Critical shares bottomed at $8-9/16, its lowest level since the company went public in April 1999. The stock is off a 12-month high of $119-1/2, set in March 2000.
``Basically, management's credibility is badly damaged and it will take a lot of work to regain investor trust,'' Marlowe Burke, an analyst with Wit Soundview, told Reuters.
After markets closed on Thursday, Critical Path posted a loss of $11.5 million or 16 cents per share, excluding unusual charges, on $52 million in revenues. Chief Executive Doug Hickey last month had said the company was on track to turn a profit in the fourth quarter.
Analysts on average had been looking for a profit of 1 cent a share, according to First Call/Thomson Financial.
The San Francisco-based company slashed its forecasts for the current quarter. It also pushed back its timetable to turn a profit by three full quarters.
The major reason for the fourth-quarter shortfall was that auditors blocked a bid to recognize $7 million in sales of directory software that had been licensed for resale, the company said.
Critical Path also blamed higher-than-expected costs in the recently acquired PeerLogic business and provisions for ``doubtful accounts.''
Robertson Stephens analyst Rick Juarez cut his rating on the stock to buy from strong buy.
``We believe that the company's shares will trade down significantly as the ... investor base turns over and attempts to establish a new floor,'' he wrote in a report.
Juarez added that Critical Path's business model was still sound but the company had ``stumbled in its execution.''
Wit Soundview's Burke cut her rating to hold from strong buy.
Email this story - Most-emailed articles - Most- |
