As goes Cisco, so goes Wall Street.
Investors on Thursday expressed their fears over the tech titans weaker-than-expected revenue forecast and, hours before trading was closed for the day, already had erased as much as $24 billion from Ciscos market value. But Ciscos dismal outlook dragged down the overall market, too.
The negative reaction came the day after Cisco reported an 8 percent rise in its fiscal first-quarter profits and $10.75 billion in sales, but warned of slower sales as cable operators and government agencies keep a tight rein on spending. Investors didnt like that news at all and, by 1:30 p.m. Eastern, had sent Cisco shares plunging more than 16 percent, to $20.54.
The drop marked Ciscos worst day on the stock market in 16 years.
At the same time, the Dow was down .68 percent at the same time, and the Nasdaq had fallen .89 percent, due in large part to Cisco.
Analysts at investment bank UBS also said Ciscos growth projections look too aggressive, so theyre keeping a neutral view on the company.
The growth target of 12 percent to 17 percent is too aggressive and will lead to either more acquisitions or the company being spread too thin,” analysts wrote in a Nov. 11 client memo.