Why Violin Memory Shares Plunged (Again)

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 Violin Memory  (NYSE: VMEM  ) fell more than 16% after reports confirmed the company's chief technical officer has resigned. What's more, additional rumors are circulating that Violin Memory CEO Donald Basile could be leaving as well.

So what: Today's news comes on the heels of last month's harrowing 48% stock plunge, which was spurred by Violin Memory's terrible first earnings report as a publicly traded company. In that report, Violin revealed a massive $34.1 million generally accepted accounting principles loss and weak forward guidance, fueling worries regarding just how long its dwindling $134 million cash pile will last.

To make matters worse, the company also has its hands full fending off a slew of shareholder lawsuits, with most alleging Violin breached its fiduciary duty by not adequately informing investors of challenges stemming from the U.S. government shutdown leading up to its September IPO.

Now what: As it stands, and even with shares trading 71% below its $9 IPO price and 63% below its first-day close, I think investors would still be wise to steer clear of the stock. Once again, until Violin Memory can prove it has what it takes to achieve sustainable top-line growth and profitability over the long term, you'll find me watching from the sidelines.

Secure your future with these solid stocks instead
If not in Violin Memory, where you should put your hard-earned money to work?

One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks as a group handily outperform their non-dividend paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.


Read/Post Comments (0) | Recommend This Article (2)

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.

Be the first one to comment on this article.

DocumentId: 2763653, ~/Articles/ArticleHandler.aspx, 4/18/2014 2:54:26 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement