Just about this time last year, almost every investor thought Teavana Holdings (TEA) was the tea version of Starbucks (SBUX). The IPO was hyped and the stock started strong. Fast forward to today, and the stock is falling to new all-time lows more than 50% below the initial closing price.
Wednesday alone, Teavana crashed 17% on news that Q1 2012 revenues came in slightly below expectations, though 27% higher than last year. Earnings were in line, so clearly investors expected the numbers to beat to punish the stock this much.
Company versus Stock
This stock is a perfect example of the difference between corporate results and the action of the stock. While Teavana the company has performed mostly in line with analyst expectations, the stock has been crushed as a lofty post-IPO valuation left investors expecting estimates to easily exceed.
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