Why Symantec, Geospace Technologies, and Rally Software Development Tumbled Today

The stock market finished down modestly on Friday, but several stocks posted much more dramatic losses. Find out why these three companies fared so poorly today.

Mar 21, 2014 at 8:31PM

At first on Friday morning, it appeared that the stock market would continue higher, riding momentum from yesterday's solid gains and trying to build up some more upward momentum after a sluggish beginning to 2014. But an early rise gave way to nervousness going into the weekend, and major market benchmarks finished the day modestly lower. For Symantec (NASDAQ:SYMC), Geospace Technologies (NASDAQ:GEOS), and Rally Software Development (NYSE:RALY), however, Friday was a lot crueler, with dramatic drops in all three stocks.

Symantec fell 13% after the maker of antivirus software decided last night to fire its CEO less than two years after he took the position. With the company saying that it expects revenue to drop 8% during the current quarter, Symantec clearly hadn't been able to execute a successful turnaround yet, and the board of directors decided that Steve Bennett wouldn't be the leader to get the job done. Still, it's hard to blame Bennett for the industrywide slump in PC sales, which has taken away one of the biggest sources of growth for Symantec and its typically bundled security-software offerings. With several downgrades following the move, investors can't be certain how Symantec plans to reawaken its potential, especially because other major executives have left the company recently.

Geospace sank 15% after the maker of equipment to help energy companies collect and analyze seismic data disclosed a possible delay of a major order. Geospace said that it had previously announced a $29.4 million order from Seafloor Geophysical Solutions covering 2,300 stations in its OBX ocean-bottom recorder node, and it expected to deliver on that order during its June quarter. But Seafloor Geophysical told Geospace that its financing for the order had fallen through, and that it would look for new investors to help raise capital to make the purchase. Geospace remains hopeful that the sale will eventually take place; it might not happen as scheduled, and the company said it couldn't estimate when delivery would finally occur. For a small company, losing this major order would be a substantial hit, explaining the stock's drop.

Rally Software dropped almost 10% after the cloud-based software developer gave disappointing guidance for the current quarter and fiscal year in its quarterly results last night. Sales rose 27% from year-ago levels, and the company pointed to substantial growth in its enterprise customer base, which includes Chipotle Mexican Grill (NYSE:CMG), Whole Foods Market (NASDAQ:WFM), and a host of other major corporations that would generally point the way to faster sales gains ahead. Yet, investors weren't impressed by Rally's outlook for 21% to 22% sales growth in the current quarter, and even a slightly faster 23% to 26% growth rate for full-year fiscal 2015 revenue left investors wanting more, especially given extensive net losses even after adjusting for various measures. Rally is in a hot industry, but it has to keep growing quickly in order to satisfy its shareholders.

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John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool's board of directors. Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Chipotle Mexican Grill, Geospace Technologies, and Whole Foods Market. The Motley Fool owns shares of Chipotle Mexican Grill and Whole Foods Market. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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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