Why WebMD Shares Jumped
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 jumped today by as much as 13% today after the company outlined cost-saving initiatives.
So what: The company said it would lay off 250 people, which is about 14% of its total staff. These workforce reductions will take effect at the end of the year, but other cost-saving actions will be put in place throughout the first quarter of 2013.
Now what: WebMD is looking to reduce annualized operating expenses by $45 million. The company is also making its sales and delivery processes more efficient to boost collaboration with clients, and it will focus on its most important growth areas. As a result, WebMD will incur pre-tax restructuring charges in the range of $6 million to $8 million in the fourth quarter, primarily related to severance. The announced changes hadn't previously been factored into WebMD's full-year guidance.
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The article Why WebMD Shares Jumped originally appeared on Fool.com.Fool contributor Evan Niu, CFA, has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.