Digital River Shares Plunged: What You Need to Know


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 e-commerce enabler Digital River (NAS: DRIV) fell more than 18% in early trading after the company reduced full-year guidance.

So what: Management now expects the company to earn $1.12 a share on $393 million in 2011 revenue. Earlier estimates had called for $1.15 a share on $405.5 million, Reuters reports, while analysts were looking for $406.2 million and $1.14 a share.

Now what: Fools have expressed mixed feelings about Digital River for a while now, giving it just three of five stars in Motley Fool CAPS. My own analysis says the stock is underrated, but lower guidance doesn't inspire much confidence. Do you agree? Disagree? Let us know what you think about Digital River using the comments box below.

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At the time thisarticle 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.Motley Fool newsletter serviceshave recommended buying shares of Digital River. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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