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 Acacia Research (ACTG -1.81%) fell 11% today after the company released disappointing earnings.
So what: Revenue dropped 54% in the second quarter, to $23.1 million, and the company lost $12.5 million, or $0.26 per share, during the quarter. On an adjusted basis, the company earned $0.13 per share, but even that was well below the $0.47 analysts expected.
Now what: Results can fluctuate wildly quarter to quarter but the general trend for Acacia is downward, and that's concerning. For the six months ended June 30, the company's revenue fell 33%, and earnings dropped 67%, mainly due to higher litigation costs. The bottom line is that this is a highly risky stock, and technology companies that may license their patents don't necessarily see the patent portfolios as the deterrent management hoped it would be.
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