When I wrote about VeriFone Holdings, Inc. (NYSE:PAY) in January 2008, I pointed out that there is never just one cockroach.
We received a lot of positive feedback on the article because readers appreciated the detailed research. Many investors are not fans of CEO Douglas G. Bergeron. PAY just gave its shareholders some news that made them puke:
- VeriFone shares fall ahead of trading
Shares of VeriFone Holdings Inc. dropped in premarket trading Thursday after the payment processing equipment maker said it expects fourth-quarter results to come in below its own expectations as well as Wall Street’s.
- VeriFone Comments on Expected Fourth Quarter and Fiscal 2008 Results
“We will focus on continuing to provide our customers with industry-leading products and services and making calculated strategic investments for future growth,” added Douglas G. Bergeron, Chief Executive Officer of VeriFone. “We remain confident that the key elements of our growth strategy — product upgrades to meet security standards and the need forpayment solutions in emerging markets — remain intact despite the recent turmoil.”
- Verifone downgraded by JP Morgan
The news prompted J.P. Morgan analyst Tien-tsin Huang to downgrade shares of VeriFone on Thursday to “Neutral” from “Overweight” and cut revenue and adjusted earnings estimates for fiscal 2009.
Chris O’Brien, a business columnist for the San Jose Mercury News, wrote an article in June that noted that ’something is not right’ with PAY:
- Boots Del Biaggio’s BFF Doug Bergeron of Verifone: A Match Made In …?
By the way, Bergeron - who sold $134 million worth of VeriFone stock from September 2005 to November 2007 - ran into his own problems in December when it was disclosed that his company had overstated its pretax profits by 80 percent. Oops. . . . Yikes. Bergeron also said he was giving up the chairman’s role, but would stay on as CEO. But there was no word on whether he planned to give back any of the money he made from selling stock during the period when the company was overstating its profits (and enjoying a nice run up in the stock price).
It was a pleasant surprise to see one of his readers post a link to our original article in the comments section. Let’s take a look at what the price action of PAY has been telling investors since we wrote the original article.
Verifone (PAY)
Daily Chart with InVivo Swing Trading Tools
Daily Chart with 50- and 200-day Moving Average
Daily Chart with InVivo Swing Lines
As we can see from the last chart, I marked off the sideways trading range right after huge gap down move. It traded in between $10 and $20 area until the recent breakdown through the $10 level with conviction.
So I guess there is never just one cockroach. And, yes Virginia, we can do non-sentiment articles. ;)
