REDWOOD CITY, Calif.-Investors tore Openwave Systems Inc. share prices in half after the company significantly lowered its fourth quarter outlook.
Trading in wireless data giant Openwave was massive after the news, as shares dropped more than 50 percent. Openwave’s share price was about $2.10-an all-time low for a company that once enjoyed almost $200-per-share prices in 2000.
The company-which earlier this year expressed optimism in the market for wireless data software, asserting that it had “passed the most difficult section of the business cycle”-said it now expects fourth quarter revenues between $64 million and $71 million, far below that of the originally expected $80 million. The announcement sparked a rash of downgrades from Credit Suisse First Boston, CIBC World Markets and others.
While noting Openwave’s long-term potential in the industry, research firm Lehman Brothers said, “Openwave is facing difficult market conditions across both its wireless and wireline business given a macroeconomic slowdown and a revision lower of carrier (capital expense) budgets.”
Openwave will release its full fourth quarter results later this month.
