Just to preface, I disagree with Briefing.com, and bought at $6 today...
briefing.com
Excerpt...
"CMC INDUSTRIES INC (CMCI) 6 3/8 - 4 1/16. What's an investor to do after a company says it just lost its largest customer. Obviously, the first reaction is to prepare to dump the stock. From my experience, if the news hits before the market opens, it is best to unload the stock with a market-sell order. Often times such a strategy will save you 10%-15%. In this particular case, CMCI shares opened at $8.125, following the release of news that PC maker Micron Electronics plans to end its relationship with the contract manufacturing company. Although the $8.125 opening price represented a decline of 25% from yesterday's closing tick, one could have saved as much as 22% had he sold the stock early. What occurs is that you have investors who are waiting for a rebound before they sell. However, very rarely do you see a major recovery within the first hour of trading. As selling accelerates, those trying their hand at being patient simply fold and sell the stock. Once these events play out, the investor is left with two options: simply walk away or take the chance that value-hunters will rally the stock off its lows. When the news is not too bleak, a 10%-15% rebound over the next several sessions often occurs. But in this case, the company lost a customer that accounted for approximately 40% of its revenues. So even with the stock down 42% on the session, it is hard to make a case for CMCI."
DD |
