Tumbleweed: Seriously, We Didn't Know

Baldwin Louie — Fri, 05 Jan 2001 14:00:00 -0800

Although it's due to announce quarterly revenues Jan. 25, Net messaging-service company Tumbleweed Communications (TMWD) has apparently just discovered it will miss estimates by half. But where were the company's confessionals all along?

Don't ask MSNBC's Christopher Byron. "Time out," yelled Byron on his "High Noon on Wall Street" Webcast. "Why are we hearing this now? They just found this out yesterday? I don't think so." Analysts were no more helpful to investors, fumed Byron. Credit Suisse First Boston downgraded Tumbleweed's $3 stock on Wednesday, following Dain Rauscher's (dossier) move the day before. "Thanks, guys," Byron jabbed. "Where were you when we needed the information?" Byron also raised a larger issue. If Tumbleweed's stock price had gone from $15 to $3 in two days, he wondered, "was there any value there to begin with?"

To ZD Interactive Investor, Tumbleweed's troubles were a hit-and-run story. It repeated the company's claim that the dual evils of stingy IT spending and delayed purchasing decisions were underlying its missed targets and the resulting 20 percent workforce cut. Tumbleweed's shares dropped 70 percent the next day, falling $6.97 to $3.03, ZDII noted. Trying to look on the bright side, TheStreet.com reported that even though revenues were lower than expected, at about $7.5 million, they were still up from $4.54 million in the same period last year. Oops - there's that red flag, "lower than expected." How much lower, you ask? TheStreet.com deadpanned that analysts polled by First Call/Thomson Financial had guessed Tumbleweed's quarterly haul would be $15.5 million.

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Tumbleweed: Seriously, We Didn't Know