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 global financial broker MF Global
So what: Analysts, on average, were expecting MF Global to report an adjusted second-quarter profit per share of $0.06 on $301 million in revenue. The company wowed onlookers by revealing a $0.09 per-share loss on just $206 million in revenue. That's a pretty hefty whiff.
The loss represents a significant slip-up on MF Global's path to trying to become a broader investment-banking competitor in the mold of CEO Jon Corzine's former employer, Goldman Sachs
Now what: Financial companies like MF Global don't report smooth earnings, and it's to be expected that there will be significant peaks and valleys due to market conditions. So should investors jump in now while the rest of the market is overly pessimistic about the company? At the levels shares are trading at, there's definitely a case to be made. However, the direction Corzine is taking MF Global in means that more risk will be introduced. That could mean a big payoff if big-picture execution is better than what we're seeing this quarter, but it could mean disaster for the already-highly leveraged company if it's mismanaged.
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