3 Tech Stocks That Crashed This Week

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  • 1. 3 Tech Stocks That Crashed This Week
  • 2. These 3 stocks missed a minor tech rally Source: Wikimedia Commons.
  • 3. From June 9 to June 13: • 57% of tech stocks with more than $300 million market caps advanced this week. • Plug Power, NQ, and Finisar didn’t get the memo. • Their weekly declines ranged from slow (Plug Power quietly lost 5.5%) to terrifying (Finisar plunged 20% overnight).
  • 4. Plug Power had a quietly disappointing week. No big, fresh news driving the action.
  • 5. Good news on Thursday Source: Plug Power. • Speaking at the Green Retail Decisions Innovation Summit conference, Plug Power sales VP Erik Hansen raised buying interest from the audience. • “The significant value of Plug Power's hydrogen fuel cell solution became more apparent as the audience began to understand the productivity gains provided by our economic and green GenKey solution,” Hansen said afterward. • But the Thursday gains didn’t last.
  • 6. Plug Power’s problem: • The company presented terrible first-quarter results in April. • Investors are still digesting the bad news. • It doesn’t help that Plug Power shares are notoriously volatile.
  • 7. How volatile? You might be surprised…
  • 8. Plug Power has gained 812% in the last year, warts and all.
  • 9. …but the stock is still down 60% in 5 years and even worse over longer periods.
  • 10. The Plug Power takeaway: • Plug Power is a turnaround story in progress. • If hydrogen fuel cells take off in a big way, the rewards can be huge. • But that’s hardly a guaranteed outcome. Plug Power could also crash and burn if other alternative fuels win out. • This is a high-risk, high-reward stock. • Plug Power remains more of a gamble than a sound investment until further notice.
  • 11. China-based mobile Internet vendor NQ lost 15% this week.
  • 12. What’s wrong with NQ? • You might recall NQ shares jumping 34% overnight, just one week earlier. • That pop signaled the end of a fraud investigation. • So NQ came out with a clean bill of health, but investors still want more… and for good reason, too
  • 13. Well, what’s missing? NQ investors are still waiting for: • An overdue annual report, and • A complete report of the fraud audit’s findings. Without these documents, investors are losing patience – not to mention confidence in NQ’s financial health.
  • 14. Where is NQ going next? • Fellow Fool Steve Symington recently explained how the risks and opportunities stack up around NQ. • Spoiler alert: Steve says that the shaky rewards are not worth the real risk of NQ shares perhaps going to zero.
  • 15. Finally, optical networking expert Finisar took the dramatic route, plunging 20% overnight.
  • 16. What happened to Finisar on Friday? • Thursday night, Finisar reported fourth- quarter results. • As the chart shows, investors didn’t like the report at all. • They had expected more, thanks to strong results from major Finisar customer Ciena just one week earlier.
  • 17. Finisar by the numbers • Finisar’s sales did jump 26% year-over- year, beating analyst targets. • But gross margins compressed 4%, and earnings disappointed. • Looking ahead, Finisar’s management expects another quarter of big sales but weak earnings.
  • 18. Is this the end of Finisar? • Not hardly. • Optical networking still has a ton of growth ahead of it. • One bad quarter will not destroy Finisar’s rock-solid balance sheet. • Fellow Fool Brian Pacampara is intrigued by the limited downside he sees in Finisar shares today.
  • 19. Here’s the Next Big Thing, ready for your investment!