52-Week Lows: eTelecare, Recent IPO For Call Center Outsourcing (ETEL)

There was a surpising screen that hit again this morning in looking at 52-week lows: eTelecare Global Solutions, Inc. (NASDAQ:ETEL).  This outsourced call center operator just came public at the end of March, and August was a truly brutal month for the stock after the company lowered its Q3 and 2007 projections.  We had previously noted how eTelecare was a potential hedge for US-based call center employees who were worried about their jobs being sent offshore.

Wall Street is particularly brutal when a fairly recent IPO guides lower because it creates a nearly permanent credibility gap.  It also can hurt the firms that bring it public because it can imply the bankers are overly trusting or may be endorsing overly touted numbers.  The negative catalyst was likely this week’s earlier call out of JMP Securities where it trimmed its $16.00 target down to $13.50.

The prior low was $8.00, and shares traded as low as $7.46 at one point this morning.  Who knows, maybe all these laid off mortgage personnel are going to work at call center operations in the U.S. and replacing the need to offshore this function.  How would that be for irony?

Jon C. Ogg
September 6, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.