Inphonic (INPC) sells wireless services and equipment, including satellite TV. Revenue in the last quarter was up 17% to $101.4 million. But, the company sent $10 million more on general and administrative costs that it had in the same quarter a year ago and its operating loss balloned to $25.7 million. Much of the increased cost had to do with accounting and legal fees for financial restatements. The company has some litigation going on with shareholders over that.
Analysts expected better of the company and traders drove the shares down to $6.73. The company had a 52-week high of $14.49.
Then all hell broke loose as DeutscheBank downgraded the stock on poor subscriber growth and what they called a "limited path to positive cash flow".
In February of this year, Inphonic had a lot of true believers. They had traded the stock all the way up to $14.49. On disappointing execution, the shares have dropped to just above $5.
Promising business, poor execution.
Douglas A. McIntyre
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