Just when you think there is no justice in the world, something happens to restore one's faith in the immutable powers of the universe to render something akin to fairness. Publicly traded web hosting provider Navisite (Nasdaq: NAVI) issued its fiscal Q1 08 earnings release this morning showing losses that were almost five times greater than what analysts had predicted.
Navisite's loss widened to $4.8 million or $.14/share compared to $2.9 million or $.09/share for the year-ago quarter even as revenues jumped by 28% to $36.1 million. Analysts had been expecting a loss of only $.03/share.
As a consequence, the company's stock is falling like a dead bird, down nearly 30% from its closing price of $8.60 on Friday. It's not entirely clear from the company's press release what triggered the widened losses and apparently Navisite's earnings call has been delayed.
This is indeed a form of justice because, as regular readers know by now, Navisite botched a server migration, triggering a days-long outage for hundreds of thousands of small business web sites -- some sites were out for a week and many small businesses shuttered in the wake of the devastation. My web sites and email were out for days, at a very crucial time period for me, and I began posting about Navisite (see full lists of posts here).
In the midst of a painful crisis for so many small businesses, Navisite basically cut off communication and attempted to downplay the problems with the press. Worse, only a few half-hearted apologies were forthcoming and the company has attempted to deny the depth of the woe its bad planning afflicted on people.
It's one thing to suffer an outage, even if due to bad management, but it's another thing altogether to keep customers in the dark and deny reality to the world. That's corporate sociopathy. And Navisite got away with it...until now.
Although some publications and top blogs were onto the story, Navisite seemed to suffer few ill effects from the crisis and I kept hoping, to no avail, that a big publication that investors take seriously would take a look at the company. Now investors don't need major publications to tell them that Navisite is in trouble. Navisite has lost 40% of its value over the past month and is down 12% over the last six months.
It's not likely that Navisite will recover from the beat-down any time soon. Celestial justice has prevailed.
Cynthia Brumfield at 10:25 AM|Comments(2)
Hopefully now NaviSite investors are punishing the company for what transpired a little over a month a go. NaviSite stock does indeed seem to be dropping dramatically and this can only continue as existing clients continue to migrate off their network, either by legal means, or voided/expired contacts.
NaviSite has destroyed the livelyhoods of many small business over the past month, and the fact that the only compensation they were willing to offer to their clients was only a small percentage of one month's monthly's fees speaks volumes.
NaviSite Stockholders, punish this company for the harm they have done in the hosting industry!
Posted by: BestWeb at December 12, 2007 5:47 PM
When I first heard of the Navisite outage I thought wow,one of my competitors seems to have tripped up. I only hope they put some ITIL/ITSM processes in place that will prevent you from experiencing this kind of unplanned outage again.
Posted by: Dave Cosio at December 12, 2007 4:35 PM
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