Sify Technologies Shares Plunged: 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 India-based Internet service vendor Sify Technologies (Nasdaq: SIFY  ) soared last week but are coming back to earth today: the stock got as much as 15% cheaper today amid heavy trading.

So what: Once again, Sify has no news to drive the trading action. Fellow India-focused online services provider Rediff.com (Nasdaq: REDF  ) is also flagging today for no particular reason.

Now what: Sify does report earnings in the early morning hours tomorrow, so you're watching the market adjusting ahead of that event. Given that the stock has more than tripled year-to-date and that a staggering 20% of its float was sold short at the latest reckoning, some caution is probably prudent. Call it a shakeout of nervous traders or sated investors taking some profits, but the result is the same: Sify is sinking today, and whether the company meets or misses estimates in tomorrow's report, the ensuing market action should be explosive.

Interested in more info on Sify Technologies? Add it to your watchlist.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. 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 is investors writing for investors.


Read/Post Comments (3) | Recommend This Article (4)

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 May 03, 2011, at 12:55 AM, suman1938 wrote:

    Sify has moved up by a staggering 1586.54% in a matter of 39 months, i.e. 539.79% annualized since November 2008. Probably you have not heard of the proverb: You can fool all people for some time and some people for all time, but not all people for all time. May be Motley Fool is a real fool in this instance! If you go through their official webpage you would see they have 1600 internet cafes spread all over the most important towns of India. In a comparatively poor country like India not all can afford an ipad, laptop or computer, what with its price, cost of maintenance, internet service provider's charges and above all infrequent shutdown of electricity in almost all cities over a prolonged period without notice! At the same time the enormous student community running into several hundred millions depend very much upon these internet cafes for their every need: education, entertainment, social activity, etc. Can you imagine the manifold income once a cafe is set up? It is a golden goose! Monday's fall in price is the result of knee-jerk reactions such as yours and not at all unusual around release of financial results. You have been making similar comments of Salesforce.com (CRM) also during the past several years, but do not seem to have learnt your lesson. I will remind you to eat your own words in the near future!

  • Report this Comment On May 03, 2011, at 4:42 AM, remunovee1977 wrote:

    As the Indian economy grows is internet and associated technology going to do anything other than grow? Sify are at the front if it does as the leading provider at present, and not just in terms of internet cafes. The market in the UK has very much moved away from internet cafes as new technology has superseded their usefulness - it can all be done so much easier on the move. The infrastructure is perhaps not there in India, but it will come in time. The hope for any investor in Sify is that they move with the changing technology. The returns on any investment over the last two years does seem a little excessive, but maybe I just wish I was in there a little earlier.

  • Report this Comment On May 03, 2011, at 9:21 AM, lizzerm wrote:

    Silly FOOLS! If you are going to invest in foreign markets, at least know what's going on in them. SIFY dropped yesterday (as well as REDF adn every other Indian stock) BECAUSE THE INDIAN EQUIVALENT OF THE FED WAS MAKING A DECISION TODAY! It hiked rates this morning by 50 basis points, which was kind of expected, but not welcomed, by the market. Market wanted 25 but feared 50. Real traders selling yesterday saw the writing on the wall and knew that inflation was so out of control that 50 basis points was probably going to happen.

    Wow, a little research on the part of the author might be nice...

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