Informatica Shares Got Crushed: 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 Informatica (Nasdaq: INFA  ) have dropped 12% today on concern about the tech industry's earnings and a big bearish bet by investors.

So what: Oracle (Nasdaq: ORCL  ) has sent many companies in the software business crashing today after reporting weak earnings last night.

This morning, put option volume exploded for February 2012 $37.50 puts. A put is profitable if a stock goes down and the volume action this morning is way outside of the ordinary.

Now what: The high put option volume is more of a short-term driver that traders look at to predict where a stock is headed in the next few hours or days. What Foolish investors should be more concerned about is a possible slowdown in business much like Oracle has seen. I would take a wait-and-see approach with shares hovering around a 52-week low right now and see how earnings play out in the next few quarters.

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

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

The Motley Fool owns shares of Oracle. Motley Fool newsletter services have recommended buying shares of Informatica. Try any of our Foolish newsletter services free for 30 days. 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 has a disclosure policy.


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