Shares in the Irish software company CBT plummeted yesterday, losing almost half their value in one day and reducing the company to one quarter of its worth of one month ago. At one point yesterday evening, trading in CBT shares was suspended on the US NASDAQ market, but when trading resumed the price continued to fall.
The shares ended last night at just over $15 (£10.10), valuing the company at around $600 million, compared to a valuation of almost $1200 million just 24 hours earlier and around $2400 million when the share peaked in July. The main shareholders are US investment funds but company management and some Irish investors have also seen the value of their holdings slashed.
The company eventually released a terse statement yesterday, saying it had missed a multimillion dollar order, and that sales, especially in Europe, had been sluggish.
Trading was briefly suspended when the share fell to $20, but when it resumed the stock continued to plummet in exceptionally heavy selling volumes. They traded below $14 at one stage, before ending the day at $15 1/4, down a massive 48 per cent from the previous close.
Some 19.2 million CBT shares were traded yesterday, compared to 750,000 shares on an average day.
The announcement comes after six weeks of relentless downward pressure on CBT stock. In mid-August, the shares were trading at around $60.
"Contrary to its expectations, the company will not receive a significant order, worth an estimated $5 million to $6 million in current quarter revenues, that it had been negotiating for some time," CBT said.
"In addition, the company has experienced softness in orders late in the quarter, particularly in Europe. As a result of these factors, the company anticipates that its revenues and earnings for the third quarter will be below analyst expectations," it continued.
But in an interview with The Irish Times, CBT's chairman and chief executive, Mr Jim Buckley, said that while missing the contract was significant, it would not lead to losses.
"What's happening is we missed our sales number, the expectation that the street had for us," he said. "It was a $5 million to $6 million contract, and the fact of life is that for the quarter that was the make-it-or-break-it number."
Pressed on whether the company would remain in the black, Mr Buckley added: "I can't really talk about that, but we believe so - what we're talking about is the street expectations."
"Wall Street has a tremendous case of the jitters right now, and any news that's bad - any small deviation from analysts expectations - Wall Street just goes crazy," Mr Buckley said.
"We've topped analysts expectations for the last 14 quarters. This quarter we told them we weren't going to make them, and this is the result," he said.
