(NSR) update on the status of the bidding process for a telecom industry database raised worries that its contract renewal might be in jeopardy, sending shares plunging late Wednesday and headed for a weak open Thursday.
Shares in Sterling, Va.-based NeuStar were down 24% before the opening bell in the stock market today.
NeuStar's contract to manage the number portability administration center, or NPAC, database expires June 30, 2015. The database is used by phone companies to route phone calls and text messages. NeuStar, which has been the NPAC database operator since 1996, garners half of its revenue from the contract.
Uncertainty is the right word as opposed to "in jeoparty". The database is the only one in the world and there isn't a single competitor that is even close to NSR among bidders. FCC and the industry must appreciate NSR's contribution and of course don't want things being messed up so the negotiation is the right thing to do. According to the conference, CEO Lisa Hook made very clear about this. Another good point from management is about the share repurchase authorized, which showed the confidence from management with healthy cash flow. The uncertainty will be there for a bit while in 2014 and the management has been prepare for that. Once the dust is clear, this stock will take off again. Just need a bit patience!
so if anything it looks like the market is under reacting? like the market the stock was trading at fairly rich valuation to begin with and cut the profits in half and you get a much lower price then where its trading now?