Can some of you all please give me the brief "cliff notes" version of the SMSI story?
I bought SMSI as part of a basket of stocks I created to capitalize on the popularity of mobile computing.
That was back in mid-August, initially I was surprised at some softness as SMSI moved down from $9.50 to around $8... No worries, the next leg up saw highs in the 15's a pullback and then the march up to nearly $17 around the first of the year.
But since then this slide to the Currnt $12.50 - 12.75 range has me perplexed. I really don't see any explaination for it.
Can someone give me the short story on what happened for the market to decided that Smith Micro is only worth 68% of what it was just one month ago?
That was amazingly timely on Morgan Stanley's part. Almost as if they knew about tonight's news in advance. That's pretty ugly if I'm reading it right (first quarter Revs 15-20 million, estimates at mid 30 million range as I recall.) I have no position in this stock though I almost bought it a couple days ago. I wonder how much of a haircut it will see tomorrow. Considering that futures are already looking down, that might add to the ugliness. Typically you'll see something like a 15% drop in a case like this. On the other hand, from a fundamental point of view, taking the midpoint they've about cut revenue estimates in half. Might see closer to 20+ % tomorrow. Then they withdrew all guidance for the year. Could be even worse, though I doubt they'll hit it for more than 33%.
vidio, soda, and a little something to compress and manage that heavy data.
could it be??????
Dunno. The jury's still out, but I can't believe that
Smith did not know of the Iphone hotspot capabilities
prior to the phone being made available to Verizon,
as two of Smith's five outside directors were top
executives at Verizon, one a SVP responsible for consumer products and services and the other a VP responsible for product and service development.
My take is SMSI got ahead of itself while it may be down 60% in the last month or 2 it is also up at least 60% from 8 months ago. Add that in with people thinking earning would go up every quarter and then being told by Bill Smith something different at a Needham conference call there was a little letdown. Needham said they looked for pressure short term and JP Morgan downgraded them.
From the guidance Bill Smith gave I would look for the first 2 quarters of 2011 to be lower than what the analysts expect but the last 2 quarters of 2011 should be real good.
The guidance I am talking about is 40% of revenue in the first half and 60% in the second half.
You already answered your own question. "I really don't see any explaination for it."
There isn't one. The big boys decided to drop the stock to buy cheaper. However the stock was probably overvalued before. It might be undervalued now. Historic PE is always low, around 10-15 for this stock...for some reason.