Thursday, April 10, 2014

Warning: Do You Own These 'Dot-Bombs'?

When shares of Big Data firm Splunk (Nasdaq: SPLK) crossed the $100 mark at the end of February, the company had just delivered its first $100 million quarter. That was more than 50% higher than a year earlier, helping to seemingly justify the company's market value, which had just exceeded $10 billion.
Analysts at FBN Securities noted that such a lofty valuation "shows that the stock is not for the faint of heart," but they saw another 15% upside to their $115 price target. As it turns out, most have investors have lost heart. This stock has plunged 40% to around $60 over the past five weeks. What was once seen as an "own at any price" stock has quite suddenly become a "too hot to touch" stock.(more)
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