Q: Bit confused over 5i responses given on WELL yesterday. 5i initially said results were good and it appeared from answer that there were no negatives. But stock was taking a big hit. Then new questions came in and you responded that there were some negatives (eg decrease in margins, net income and , cash flow). Obviously these are important as sellers stepped in and continue today so far. Usually 5i provide good insight but I think you guys dropped the ball on this one. The initial response should have hi-lited both the good and the bad. And whether the stock had a good run leading up to earnings shouldn't affect your response. Again, I stress usually you give full and fair insight and assessment but not this time.
5i Research Answer:
Our response was meant it was good on expectations, which is usually what stocks trade against. Lower margins were built into estimates. Our further answers were mostly trying to explain why some investors may have been selling. But that does not change the fact that guidance was good and was increased. Also, we of course have no way of really knowing why an investor is selling. We disagree on the run up comment, however. Investors panicked because the stock was down 10% yesterday. But looking at a five day view (pre today) basically shows the earnings release was a non-event for any investor other than someone trading around the quarterly release.