Why Jive's Shares Lost Their Mojo

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:Jive Software (NAS: JIVE) juked the market this morning, falling by over 17% after updating its guidance to levels below the Street's expectations. The enterprise social networker came in just barely ahead of second-quarter estimates with $27 million in revenue, versus analysts' consensus of $26.8 million. Net losses of $0.11 per share were as expected.

However, Jive now anticipates a $0.10 to $0.12 loss on between $28 million and $29 million in revenue for the upcoming third quarter. Wall Street had expected $29.6 million in revenue and a $0.10 loss.

So what: Full-year guidance also failed to impress, as the range of $110 million to $113.5 million on the top line and $0.38 to $0.42 in losses per share were on the lower end of Wall Street's consensus. Analysts had predicted $112.9 million in revenue and $0.39 in losses per share. Citigroup analysts subsequently downgraded Jive from buy to neutral, with a $21 price target.

Now what: Jive's new projections don't seem so low as to justify this correction on their own. Revenue was up 51% from the year-ago quarter, and losses in that year-ago quarter were a weighty $0.68 per share. Jive remains a possible takeover target, especially in light of Microsoft's (NAS: MSFT) recent acquisition of enterprise social-networking competitor Yammer for $1.2 billion. Jive's current market cap is less than $1 billion, so it could be bought at a premium by any number of large tech companies.

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The article Why Jive's Shares Lost Their Mojo originally appeared on Fool.com.

Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more news and insights.The Motley Fool owns shares of Microsoft. Motley Fool newsletter services have recommended buying shares of Microsoft. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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