Why AutoNavi Shares Sank

Why AutoNavi Shares Sank

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 Chinese digital map content company AutoNavi Holdings plunged 13% today after its quarterly results and uncertain outlook disappointed Wall Street.

So what: The stock has rallied nicely since March on optimism over its mobile mapping prospects, but today's Q2 results -- income fell 57% on a revenue decline of 5% -- are forcing Mr. Market to quickly sober up. In fact, management also announced plans to scrap its old way of providing guidance and begin using new operating metrics, reigniting concerns over its business model going forward.

Now what: Management believes that its previous guidance is no longer a good indicator of its long-term value. "Going forward, AutoNavi will share on a quarterly basis its total number of mobile app users and monthly active mobile app users," wrote the company in a statement. "AutoNavi will continue to evaluate its business and look to introduce additional operational and financial measurements over time to help investors analyze its progress." So given all the uncertainty surrounding the stock at this point, Fools would probably do well to stay on the sidelines.

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The article Why AutoNavi Shares Sank originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.

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