Q: 1. Has the company been totally honest prior to reporting last month. Please explain, since many research groups were recommending it including yours.
2. Is this thing worth holding while being down + 50%
3. Why would a company in such a mess declare a dividend?
Thanks DAN
2. Is this thing worth holding while being down + 50%
3. Why would a company in such a mess declare a dividend?
Thanks DAN
5i Research Answer:
The 2Q was disappointing, with the company citing longer lag times for deals, which is likely a reflection of customers' uncertainty as to the economic outlook. Guidance was lowered. The company also lost a large customer. We do question its reasoning for the customer loss ('it wasn't a good fit') and we do think management should have been more forthcoming on this development. Without it, investors simply worry about other large customers leaving. The dividend was more like a 'peace offering' to go along with the bad news. But with a company with $1.1B in obligations it makes little sense to us.