Shares of Taser and body-camera maker TASER International, Inc. (AXON -2.81%) fell 21.8% in October, according to data provided by S&P Global Market Intelligence, after investors worried the company may lose its dominant market position.
When TASER lost a contract to sell 1,000 body cameras to the NYPD to upstart VieVu, investors got worried that the company was in real trouble. VieVu offered much lower prices than TASER International, and if the former continues to be aggressive in bidding for contracts, it could put pressure on TASER's sales volume as well as margins.
Since then, TASER International has fought back by offering 1,000 body cameras for the NYPD to test out, arguing that its product is better than VieVu's. That could help it break into the country's largest law enforcement agency, which would be a big win.
There was a tantrum in the market when the NYPD contract appeared lost, but it was ultimately one contract out of many TASER has won this year. Recently, it signed a deal with the Seattle Police Department, which happens to be where VieVu is headquartered -- another sign the company isn't going to go quietly into the night. I think long-term, the NYPD deal will be a bump in the road, but it got TASER investors worried last month.