Tough Times for Rubicon: What Lies Ahead?

| About: Rubicon Technology, (RBCN)
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It’s been a mighty rough go for Rubicon Technology (NASDAQ:RBCN) shareholders in recent months. Since I posted about the CEO and CFO liquidating their entire positions in the company on June 23rd, the stock is down about 50%. Selling near the top saved the CEO nearly $2.5 million. You have to wonder now when the company plans to buy back the stock. If market timing prowess at the top is any indication, it may be worth watching for.

Shares of RBCN are certainly looking much more compelling down at these levels, but there is still no indication that the selling has subsided, particularly following today’s 10% plunge on a Sell rating from Sterne Agee. According to Barron’s, the firm initiated the company with a Sell rating and just a $10 price target due to margin pressures next year. The firm notes that while demand will remain strong next year for all phases of LED production, a rush to fill the demand will lead to oversupply in the 2nd half of next year.

The next level of significant support for RBCN is around the $15 level, so despite the destruction in shares there could be more pain left before the stock begins to stabilize. A drop to $15 would offer a tremendously compelling entry point for a long term position.

Disclosure: No positions