AllThingsD » tech stocks

Analyst: The Great Dark Times Cometh!

John Paczkowski — Sat, 04 Oct 2008 00:19:32 +0000

The financial markets’ descent into the maelstrom over the past several weeks is proving quite a test of faith for Collins Stewart analyst Sandeep Aggarwal. Last week he cut his estimates for Yahoo (YHOO), citing the company’s deteriorating fundamentals. Since then he’s become increasingly dismayed by Wall Street’s continued collapse, so much so that today he slashed estimates on a host of tech stocks, among them Google (GOOG), Microsoft (MSFT) and comScore (SCOR). “Failed banks, massive credit crunch, job losses, and lower consumer confidence now characterize the macro economy,” Aggarwal wrote in a Friday research note. “We believe this will hurt the Internet sector more than currently believed.”

And it will hurt some Internet companies more than others.

“Should the economy run into a recession, this would be only the second downward economic cycle for the Internet. Each Internet company is at a different phase of its evolution,” Aggarwal added. “We believe that a possible recession will be felt harder by those companies that have been delivering extremely high organic growth rates, have high operating leverage, or are approaching minimum operating scale levels in 2008-2009.”

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Red Hat Shares Slide as Q3 Guidance Disappoints

Eric Savitz — Thu, 25 Sep 2008 21:49:48 +0000

Red Hat (RHT) shares are trading lower in an otherwise upbeat session for tech stocks, after the company last night provided lower-than-expected guidance for its fiscal third quarter ending November.

On its post-earnings conference call, the company said it expects revenue for the quarter of $169 million to $171 million, and non-GAAP profits of 16-17 cents a share. The Street has been looking for $172.4 million and 18 cents.

Asked on the call whether Red Hat is still backing its previous full year guidance, CFO Charlie Peters appeared to back away from the company’s most recent forecast. “We are basically taking, I’d say, each quarter at a time” due to “volatile” interest rates and exchange rates, he said.

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No! Short-Selling List Now Includes … IBM?

Eric Savitz — Wed, 24 Sep 2008 23:16:04 +0000

OK, so this is getting ridiculous.

The SEC this morning added another dozen names to its list of stocks that are temporarily banned from new short sales. The weirdest addition: IBM. That’s right, IBM, one of the world’s leading technology companies. Someone needs to explain this to me, because I don’t get the logic.

What makes this especially weird is this: IBM shares are actually dramatically outperforming the market this year; the stock is up 7.8 percent year to date, beating the pants off both the major averages and most other large-cap tech stocks. In short, IBM has been a terrible short.

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