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.
Posted by Cynthia Brumfield at 10:25 AM | Print | Comments (2)Ever since Napster single-handledly and almost overnight smashed the music industry's decades-old business model, the profusion of innovative new ways to listen to music just keeps accelerating. A spate of developments point to the growing number of online options available for listening to and downloading all kinds of music.
First, Universal Music announced today it has become the fourth major record label to join imeem's music-based social networking service. imeem allows users to create and share audio (and video and photo) lists through content uploads, an alternative to true P2P that is obviously striking a happy medium for record companies. imeem givens them a cut of the ad revenue from the site.
imeem faces stiff competition from not only Apple's dominant iTunes, which charges $.99/song, but now also Amazon's MP3 store, which launched in September and is gaining steam with its $89/song pricing and DRM-free tracks.
Subscription music services offer a third choice. RealNetwork's Rhapsody service is available for $10 to $15 per month, while Microsoft's Zune, which has gained suprising kudos lately, comes with a $15/month subscription option.
Universal Music is also participating in Nokia's efforts to challenge iTunes and change the music model on the mobile front. Hoping to take the wind out of the iPhone's sails, Nokia will offer a year's worth of free, unlimited downloads of Universal's vast song library to buyers of its high-end phones.
imeem faces stiff competition from other social networking sites when it comes to music. MySpace is mounting an online music video channel called Earwig TV, a move that follows the social networking giant's decision to offer free small and indie label music downloads on the site and probably precedes a big deal between the News Corp.-owned service and the big record labels to launch a wide-ranging music download service.
Posted by Cynthia Brumfield at 9:08 AM | Print | Comments (0)In the wake of last week's bad news for the U.S. cable industry, and given the surprising golden glow surrounding the incumbent phone industry, I started playing around with stock charts to see just how badly cable has fared on the stock market and pictures do not lie.
Take a look. Over the past year, cable stocks have sunk by dramatic levels. Comcast's shares are off 36%, while Time Warner cable has dropped 37%. Even worse, Charter is down by 57%, Mediacom is down by 40% and even industry superstar, Cablevision Systems, has slipped by 9%.
Contrast these scary drops with the stock performance of the two top incumbent telcos, Verizon and AT&T.
Over the same time period, Verizon has jumped by 28% while AT&T has climbed by 10%. Not included in the chart is the phone industry's oddball, Qwest, which is handicapped by its limited geographic reach and undiversified business agenda. Qwest has dropped by about 8% over the past year, which is not good but still outperforms the top cable companies.
Posted by Cynthia Brumfield at 12:58 AM | Print | Comments (0)
Blogs We Read
