This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Fusion-io Stock Gets Crushed

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By Tom Taulli, InvestorPlace Writer

NEW YORK ( InvestorPlace) -- In early June, data storage company Fusion-io (NYSE: FIO ) pulled off a highly successful IPO . The company priced its deal at $19, which was above its $16-$18 range. On its first day of trading, the shares increased 18.4%.
  • Related: Megaupload bust sends jitters through file-hosting community

But since then, things have been bumpy, the latest hit coming Wednesday on the news of its latest earnings report. FIO shares plunged by 16% on the day to $25.50.

  • Related: Zynga gets zinged for playing copycat

Fusion-io develops whiz-bang storage technology for data centers, and it counts Facebook among its customers. And its chief scientist? None other than Steve Wozniak, the co-founder of Apple (NASDAQ: AAPL ).

There were some positives in the quarterly numbers, with revenue spiking by a sizzling 169%, to $84.1 million. But gross margins sank from 59% to 51%. With such a ramp in revenue, shouldn't margins actually increase?

  • Related: Apple's purchase of Anobit is a step forward for Post-PC future

Not always. Fusion likely is getting aggressive on investments, such as on marketing and R&D, to deal with its heavy competition. Keep in mind that EMC Corp. (NYSE: EMC ) is preparing to launch a rival offering. And then there are other comeptitors like Hitachi Data Systems, Micron (NASDAQ: MU ) and LSI (NYSE: LSI ), which have tremendous scale and also could be a big problem for Fusion-io.

Tom Taulli runs the InvestorPlace blog "IPOPlaybook" , a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of "All About Short Selling" and "All About Commodities." Follow him on Twitter at @ttaulli .

Related Articles:

  • Get the latest IPO date and IPO offering news for the hottest picks on Wall Street

  • Facebook IPO Filing on Friday?

  • Apple's eyes fixed on the cloud
This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
FIO $0.00 0.00%
AAPL $94.02 0.00%
FB $104.07 0.00%
GOOG $683.57 0.00%
TSLA $162.60 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs