Broadsoft's Shares Dropped: 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 network-based telephony expert Broadsoft (NAS: BSFT) lost signal today, falling as much as 15.4% on above-average trading volume.
So what: No news on Broadsoft itself today. IT markets are under general pressure from Oracle's (NAS: ORCL) disappointing earnings report, but VoIP rivals Sonus Networks (NAS: SONS) and Acme Packet (NAS: APKT) are just trading in line with the Nasdaq drop, so it's not a sector effect. This smells like a major shareholder moving out of the stock and not caring if the move tramples smaller investors.
Now what: 'Tis the season for mutual fund rebalancing, and Broadsoft is a large holding in many funds. Lots of the largest fund management investors here are virtual unknowns, increasing the likelihood of bad trading policies somewhere in the mix. I fully expect this stock to bounce back in a matter of days as the market attempts to stay (or become) efficient.
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At the time this article was published Fool contributor Anders Bylund owns shares of Sonus Networks but holds no other position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Acme Packet. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.
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