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The swoon in shares of KIT Digital (KITD) accelerates, now -20.3% premarket, after the...

The swoon in shares of KIT Digital (KITD) accelerates, now -20.3% premarket, after the company issues downside Q1 guidance, citing longer than anticipated sales cycles for some larger opportunities, increased personnel costs associated with deployments in future quarters, and payments of assumed liabilities arising from its Sezmi acquisition. (earlier)
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  • NoITAll2000
    , contributor
    Comments (8) | Send Message
     
    Looking at a key paragraph in their press release more carefully:
    "Contributing to the lower than expected financial results, the company cited longer than anticipated sales cycles for a number of larger opportunities this implies that revenues haven't been lost just postponed, increased personnel costs associated with deployments in future quarters implies variable costs in advance of variable revenues, payments of assumed liabilities arising from the acquisition of Sezmi implies one-time event, and higher than expected legal and advisory fees these costs could stay high for a while until all the accounting and Tuzman issues are behind them but then should subside, among other factors unclear how material the 'others' are."

     

    Looking at another quote: "During our quarterly earnings call, we will present a revised operating plan and financial outlook for a growing but how fast, cash-generative but how soon software business."

     

    So, the full story for the year will unfold further a week from Tuesday when the Company announces the final 1Q results and gives new guidance. Unless the new guidance is extremely weak, the shorts (23mm shares=20 days of trading volume) may finally cover sending the stock up higher. Meanwhile, many of the analysts will downgrade to cover their asses.
    3 May 2012, 10:12 AM Reply Like
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