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Sify Technologies Shares Got Crushed: What You Need to Know

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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 Sify Technologies (Nasdaq: SIFY  ) fell more than 24% in early trading before closing down close to 20%. No particular news drove the drop, but Indian microcap peer (Nasdaq: REDF  ) also fell more than 17%.

So what: Not that this was a subcontinent-wide slump, mind you. Rediff fell on lower-than-average volume while Sify saw more than 1.9 million shares change hands during the trading day, up 48% on the stock's three-month average. Infosys (Nasdaq: INFY  ) and Wipro (NYSE: WIT  ) , meanwhile, fell about in line with the overall market.

Now what: For Sify, put options proved particularly popular. According to Benzinga, trading volume on put options outpaced call options volume 38-to-1. The implication? Those betting on Sify are betting the stock is heading lower. Do you agree with the bears? Would you buy shares of Sify Technologies at current prices? Please weigh in using the comments box below.

Interested in more info on Sify Technologies? Add it to your watchlist.

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 Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

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Read/Post Comments (4) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 03, 2011, at 5:28 PM, pulay2win wrote:

    I am holding reluctantly believing in a much bigger picture that India has to radically improve its infrastructure when it comes to bandwidth in order to keep up with being a key player in emerging markets.

    Regardless of the doom and gloom of U.S. and Europe the time for the govt. to grow their bandwidth backbone is now.

    SIFY is one of few stocks positioned to capitalize on this both with consumer demand as well as BtoB. It has been investing in capital improvements to be a leader in India and to compete globally for its share of business.

  • Report this Comment On October 03, 2011, at 10:30 PM, waytofar wrote:

    It's an excellent buy now. The way India is growing, this might become another google in future. SIFY is one of the fastest growing company in this market segment in India. Recent SIFY news are simply outstandings to keep this in your portfolio.

  • Report this Comment On October 04, 2011, at 8:17 AM, premalshah wrote:

    I have full faith in Sify

  • Report this Comment On October 09, 2011, at 4:45 PM, constructive wrote:

    Like more and more of TMF's content farming, this article is almost entirely content-free.

    FYI, the reason SIFY fell is that it is unprofitable and trades at a high multiple relative to sales and book value.

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