Motricity Shares Drop, Pop, and Roll: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Motricity (Nasdaq: MOTR  ) fell as much as 11% in intraday trading for reasons I can't explain. Call it another case of Mr. Market shouting at the imaginary thief who stole his balloons.

So what: What's most interesting is the action. Motricity was down on heavy volume early, but it has since rallied to recover to down 2.8% as of this writing. Investors will recognize the volatility. Motricity hit a 52-week low of $6.55 in July only to reach a new high of $31.95 yesterday. Knowing that, today's sellers may simply be traders taking profits.

Now what: On the whole, Fools give Motricity a one-star rating in CAPS. Yet there's no denying the growth potential of the underlying business, which provides mobile data services to feature phones on AT&T's (NYSE: T  ) , Verizon's (NYSE: VZ  ) , and Sprint Nextel's (NYSE: S  ) networks.

Trading for more than nine times revenue, the stock is too expensive to justify buying now. But there will be more pullbacks like today's. I'd be tempted to buy on the next one.

Interested in more info on Motricity? Add it to your watchlist by clicking here.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy is at least 10% better than other disclosure policies.


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