Blinkx blitzed by blogger?
Cambridge UK technology company Blinkx saw half the value of its stock wiped out as the share price nosedived to 31.5p yesterday on a profits warning.
While the tide was stemmed by early morning trading today, the heads of management and analysts were still reeling over the speed of the descent for the Autonomy spinout. The market valuation of the company was left at a depressing £154 million.
Blinkx, a video search and advertising business, had seemed to be on an ever-upward path with a 25 per cent increase in revenues to $247 million and profits 30 per cent ahead at $31.9m last year under new chief executive Brian Mukherjee.
Now it says earnings this time around would be $5m (£2.9m) lower. The most bullish analyst is predicting earnings of $33m on revenue of $268m for the full year.
Management have blamed a fall-off in demand as well as the backlash from a blog by Harvard Business School associate professor who questioned certain of the company’s business tactics – charges investigated by Blinkx and emphatically denied.
Justified or not, the criticism has unfortunate echoes in the Cambridge technology stable. Blinkx was founded 10 years ago by Suranga Chandratillake, who was chief technology officer at Autonomy in the US.
Former management at Autonomy are still being investigated by authorities on both sides of the Atlantic after HP claimed they had been misled on figures prior an $11.1bn takeover.
Blinkx is now under new management and has been doing well on the UK’s AIM market until yesterday’s bombshell which took the stock down 52 per cent to 31.5p – its lowest for over two years. The shares hit a high of almost 244p last November.