WebMD Shares Plunged: What You Need to Know

Before you go, we thought you'd like these...
Before you go close icon

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of WebMD (NAS: WBMD) , which uses the Web to provide health information to doctors and consumers, fell more than 24% on seven times the average volume after the company lowered its full-year revenue outlook.

So what: Third-quarter revenue fell marginally compared WITH last year's Q3 and came in below expectations. Earnings exceeded by $0.07 a share, but lower guidance eliminated whatever goodwill would have come from the beat. Management now sees 2011 revenue of $555 million to $565 million, down from earlier estimates of $580 million to $600 million.

Now what: Both Carl Icahn and George Soros have taken substantial stakes in WebMD in what appears to be hopes that executives will concede to a transaction that values the business at a premium to today's levels. Management is fighting back by adopting a "poison pill" to protect against a hostile takeover. Whose approach do you believe will be best for common shareholders? Please weigh in using the comments box below.

Interested in more information about WebMD? Add it to yourwatchlist.

At the time this article was published Fool contributorTim Beyersis a member of theMotley Fool Rule Breakersstock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim'sportfolio holdingsandFoolish writings, or connect with him onGoogle+or Twitter, where he goes by@milehighfool. You can also get his insightsdelivered directly to your RSS reader.Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners