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Stock Market Crasher: GIMO's Revenue Is Stuck in Traffic
Gigamon is a tech company that helps web managers gauge and control traffic to their sites, analyze it better, and increase network reliability, security, and performance, among other benefits. For instance, one of GIMO's products can identify and direct incoming web traffic to specific tools on a website, as determined by the user's input and by the network manager's settings.
This morning, Gigamon stock fell more than 39% in pre-market trading.
Driving the decline was GIMO's announcement yesterday of disappointing preliminary results for second quarter 2014 ended June 28, 2014. The company expects Q2 revenue to come in around $34.5 million to $35 million, well under its previously stated guidance of $38 million to $42 million. Although gross margins and operating costs are expected to remain consistent with previously stated guidance, the drop in revenue was enough to cause GIMO stock to come crashing down.
"We are disappointed in these preliminary results," GIMO Chief Executive Officer Paul Hooper said on Tuesday. "We experienced challenges with closing the deals in our pipeline during the later stages of the quarter, as we continued to see longer review and approval cycles. However, we remain confident in our market opportunity and our leading technology that created this market. We will take steps to improve our execution in order to grow revenue and improve the predictability of our business. On a positive note, we added 84 new customers during the second quarter."
GIMO will report its official Q2 2014 earnings later this month on July 24, after market close.
Gigamon stock traded at $12.40 per share as of 11 a.m. EDT, down 31.79% so far on the day, and 55.24% year to date. This stock market crasher was downgraded to "Neutral" from "Buy" by analysts at Goldman Sachs, and to "Underperform" from "Neutral" by Bank of America/Merrill Lynch.
Our next stock market crasher also had a disappointing Tuesday, sparking massive share value loss today…