Navisite Shares Plunge 28 Percent
Shares of IT infrastructure provider Navisite plunged by $2.45 a share Monday to close at $6.15, a drop of 28.5 percent, after the company's quarterly earnings disappointed investors. Prior to the market's opening, Navisite (NAVI) posted a loss of 8 cents a share for its first quarter of fiscal 2008, while analysts had been expecting a break-even quarter, according to Reuters Estimates. Navisite also said it expects revenue of $39 million to $40 million for the second quarter, shy of analyst expectations of $41.85 million.
The decline in Navisite follows a similar setback for managed hosting provider Savvis (SVVS), whose shares have dropped 24.5 percent over the last three sessions after the company lowered its guidance to reflect additional spending on new data center space. While the decline has yet to spread to the shares of other major data center builders, it appears that investors are interpreting even minor disappointments on earnings and revenue guidance as an opportunity to take profits.
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By Rich Miller 
December 10, 2007 | Permalink | >Get Posts By E-mail
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Comments
You are punished by your customers for not having enough datacenter capacity, and punished by the capital markets if you invest in datacenter capacity. Go figure.
Posted by: chuck goolsbee at December 10, 2007 09:23 PM
NaviSite investors should be disapointed in this company considering the recent NaviSite data center migration, that devasated thousands of small business owners last month. NaviSite had purchased the Alabanza Datacenter in Baltimore and attempted to migrate it to Andover which resulted in a 7 day outage. NaviSite investors may be finally punishing this company for the damage they have done to the web hosting industry.
Posted by: BestWeb at December 12, 2007 06:01 PM