Why Did My Stock Just Die?

The market can't decide whether the EU taking cash from individual Cypriot depositors to stave off a default by the government is a good thing or not. On Friday, the Dow Jones Industrial Average rose 90 points on the prospects a deal would be hammered out, and in midday trading today the index was falling because they actually agreed to it. Seizing the bank accounts is a harsh penalty for individuals who didn't contribute to the financial calamity and depositors everywhere have to be calculating the risk for a similar raid on their own accounts.

The three stocks below faced a run of a different sort as investors turned tail, but this could just be a temporary situation. Let's first see whether they had good reason to fall as panic-fueled routs can sometimes lead to excellent buying opportunities.

Company

Change

TIBCO Software (NASDAQ: TIBX  )

(9.4%)

ACADIA Pharmaceuticals (NASDAQ: ACAD  )

(8.1%)

BlackBerry (NASDAQ: BBRY  )

(7.7%)

Big expectations
Investors are hoping big data is as much of a big deal as enterprise software vendor TIBCO Software says it will be, because quarterly revenues came up well short of expectations, sending its stock sharply lower on Friday. 

There might be something to management's confidence, though, because its optimization products saw a 37% jump in sales in the quarter, indicating there will be future growth there, too. But the software specialist still had a hard time putting behind it the very weak results it recorded in licensing, where sales fell 5%. Guidance, however, suggests licensing revenue will be down another 10% in the second quarter.

While it booked over 100 new deals worth $100,000 or more, the dozen it booked worth $1 million or more was down from the 20 such lucrative deals it recorded last year, so there's a lot of distance to go yet to shore up the shortfall. And analysts just don't see big changes on the horizon for TIBCO, downgrading their outlooks for the stock even if they maintained their ratings. Some of those were cut as well because competitive pressure from IBM and Oracle is piling up such that up-and-comers like Splunk are viewed as better options for playing big data.

After coming up short last quarter and blaming its North American president for the problem (and then sacking him), I suggested TIBCO was suffering from problems greater than just one person and any turnaround would probably take more than one quarter to work itself out. After reviewing the current quarter's results, I'm not sure TIBCO has proven it's ready to turn around just yet.

Give and take
Easy come, easy go. ACADIA Pharmaceuticals was up 24% the other day on data that was essentially a rehash of what investors already knew, so we shouldn't be surprised that they might have used the opportunity to take some profits off the table on Friday. That the decline was of a smaller magnitude than the rise, however, at least gives investors some room -- and money -- to play with.

The Fool's Brian Orelli isn't one who thinks it's time to climb on the bandwagon just yet, though. Because the stock surge was based on previously reported data for pimavanserin, the big jump last week means that investors were worried there might have been some unpleasant surprises lurking in the shadows. The company has two failures for Parkinson's already to its name, so being skeptical might have been the wise move.

Brian's not convinced there's not a lot of rough road ahead for ACADIA, and with antipsychotics already on the market being prescribed off-label, even a successful navigation of the clinical trial maze might not be enough to get it going. Yet as I noted last week, a drug specifically targeting a disorder might still gain plenty of traction, so I wouldn't give up on ACADIA just yet.

A black eye for BlackBerry
Given all the hype and anticipation built into the resurrection of BlackBerry's new smartphone and operating system, how could it do anything but disappoint investors?

The new Z10 was expected to launch with a lot of fanfare, but a report in Friday's Wall Street Journal suggested that rather than bunting and balloons for the smartphone, the reception has been more of a shrug. There's no real incentive to move to the new BlackBerry: it's comparably priced to the iPhone and Android devices already on the market and the new software isn't that compelling to make anyone want to switch.

I said last year as the hype was building that this was BlackBerry's Hail Mary pass. It might be too soon to tell whether the ball's been caught, but there's a lot of bobbling going on. Right now, it looks like the clock has run out on BlackBerry. The buyout rumor that got everyone excited the other day may still be its last best hope.

Ready for a resurrection
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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 March 25, 2013, at 9:28 PM, Oril wrote:

    The fact is that Blackberry did not sell off today. It sold off Friday, pre market and at the open and then ended the day well into positive territory.

    For those of us who had our stops taken out Friday at 16 dollars on the unwarranted negative hype and were able to purchase back 15 % more at 14 dollars the day went quite well. Tomorrow the stock either goes back up as earnings nears or we do it again. Either way is win, win with the big payoff coming Thursday morning.

    Too bad for the 140 million shorts for which is now too late to cover

  • Report this Comment On March 26, 2013, at 8:51 AM, TMFCop wrote:

    For those of you that are CrackBerry addicts, it's fine that you're loyal to your product, but really, it's a tad juvenile to resort to name calling over a stock, no?

    Defend your product, defend your stock, but please, try and at least act mature enough to prove you're old enough to post on discussion boards.

    Comments that violate simple rules of common courtesy will be removed. And we'll tell your mother on you so that she puts you in a corner for a time out.

    Rich

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