PD IV

[sallen]

The day is still young, but if I was long right now the reaction in QLGC to its warning would have me terribly nervous. Here's the warning summary from briefing:

"QLogic guides below consensus (QLGC) 42.69: Co issues Q4 guidance of $0.36 on expected revenues of approx. $128 mln -- Reuters Research consensus $0.38 and $140.23 mln. Co says the majority of the revenue shortfall is related to a decline in expected orders from two original equipment manufacturer customers for host bus adapters at the end of the quarter."


Relatively speaking, this was already a value stock in the tech space. A mild warning and the stock is responding with one of its biggest drops ever if it were to close here. 21% loss right now. The worst was 25% on 5/8/00. Could be an overreaction and the stock goes right back up (and I see one analyst already defending), but after watching this one I'm curious to see what happens if one of the richly valued tech stocks warns in the next few days. Do earnings matter now? No free passes this quarter since the market isn't bulletproof anymore?