Out Fox The $treet

The stock of Riverbed Technology (RVBD) had been absolutely decimated over the last six months as the company reported back on the Q411 report in January that it would be going through the growing pains of a massive new product cycle. The stock dropped from $30 to $24 in January before rebounding back to $29 before falling off the cliff when Q112 results again disappointed. (See How Did A $5M Revenue Cut Turn Into A $1.35B Market Value Drop? article.) The company though remained resolute that the new product cycle and more importantly the important WAN Optimization market remained strong. After the close on Tuesday, the company reported Q212 numbers that blew past analyst estimates, sending the stock up over 20% after hours back above $18. Read the full article at Seeking Alpha. Disclosure: Long RVBD and CSCO. Please review the disclaimer page for more details. 

Clearly the market doesn't work in very precise ways, but honestly how does a $5M revenue cut in guidance lead to such a dramatic loss of market value? Maybe "fuzzy math" is at work. Most investors probably saw that Riverbed Technology (RVBD) lost nearly 29% of its market value on Friday. The company reported basically in-line Q112 numbers. Not too bad at this point considering the major product transition going on. Then the wheels started falling off during the conference call. The CFO guided to revenue that at the high end would miss the $202M Q2 estimate by roughly $5M. Yes, anybody doing the math is probably struggling to understand the stock plunge. It dropped 29% due to a 2% reduction in revenue. All while investors should've known that the company was going through a product transition that would muddy up the financials for the 1H of the year. Read the full article at Seeking Alpha. Disclosure: Long RVBD and CSCO. Please review the disclaimer page for mo...

Wow! Wow! Wow! While expecting huge results from Riverbed Tech (RVBD), the actual numbers were beyond any expectations. RVBD reported Q3 earnings of $.34 versus $.27 estimates. Revenue increased 17% sequentially to $148M vs $135M estimates. Not often that a company reports a revenue beat of 10%. In fact both numbers easily exceed the Q4 estimates. Very impressive! These numbers had to be impressive to justify the 35x forward PE. Hence, Stone Fox unfortunately trimmed a third of our remaining shares in the Growth and Opportunistic Portfolios leaving roughly 50% of the original investment. Considering the stock was up over 100% in both portfolios it was just time to take more profits considering the wide swings in stock trading. Equinix (EQIX) dropped 30% after missing earnings and VMWare (VMW) dropped 7%. Guidance was for $155-158M with earnings of $.35. Appears they sandbagged on earnings especially considering the crushing numbers in Q3.Operating margins are expected to be flat, b...