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Why Synchronoss Technologies, Inc. Stock Dropped 11.4% in November

By Steve Symington - Dec 5, 2017 at 7:46PM

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An analyst reiterated his rating and and a bearish price target on the mobile software company. Here's what investors need to know.

What happened

Shares of Synchronoss Technologies Inc. (SNCR -3.17%) fell 11.4% in November, according to data from S&P Global Market Intelligence, after a notable analyst reiteration.

More specifically, with shares trading up modestly from the start of last month through Nov. 29, Synchronoss stock plunged nearly 13% in a single day on Nov. 30. Though it first appeared that there was no news to substantiate the drop, it seems that a note on Nov. 29 from Stifel Nicolaus analyst Tom Roderick is the likely culprit behind the plunge.

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So what

More specifically, Roderick reiterated his "hold" rating and $10-per-share price target on Synchronoss stock. The problem? Synchronoss Technology stood at around $11.52 per share when Roderick offered his comparatively sobering view.

It's hard to blame investors for scaring easily. Shares plunged nearly 50% in a single day in late April, when the company's CEO and CFO simultaneously stepped down following a monstrously bad first quarter. And after delaying its first-quarter report in May, shares dropped as much as 10% again in June, after the company disclosed it would need to restate its financial statements for both 2015 and 2016.

Then in July, the company announced a review of strategic alternatives, followed by the conclusion of that review, which resulted in the sale of Intralinks -- a company it only just acquired for $821 million at the start of this year -- for $1 billion.

Now what

Most recently, Synchronoss revealed on Nov. 20, 2017 that it received a letter from Nasdaq stating its common stock would be subject to delisting on the index, because of the delayed financial filings for its most recent three quarters. Synchronoss requested a hearing before the Nasdaq Hearings Panel that automatically stayed its potential delisting for 15 days, which means investors should be receiving another update on the matter any day now.

In the meantime, and until Synchronoss gets its financial house in order, I think investors would be wise to watch its story unfold from the sidelines. 

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