The Q3'13 earnings were bad as the revenues declined sharply both on a yoy and sequential basis. Even the net loss increased on a yoy and a sequential basis. The ttm figures indicate that 2013 will be a bad year for the company. Consequently, the earnings release led to sharp decline in the stock, and the after hours quotes are indicating that there could be more pain in store. It will be difficult to get out of this hole as the company has posted bad numbers for three quarters in a row. It is now a declining trend, and there could be downgrades from analysts. The trading volume was 1.4 million, but it seems that the entire impact of the numbers has not been factored yet. These earnings were extra crucial, and now the stock may go to much lower levels over the next few months. It has broken the strong supports around $20-21 and now may go all the way to $15-16. The Q3'13 revenues were $15.5 million compared $34.9 million in Q3'12 & $23 million in Q2'13. The net loss was substantially higher at $15.7 million compared to $6.6 million in Q3'12 and $12.5 million in Q2'13. In the third quarter of 2013, three licensees individually accounted for 34%, 31% and 19% of revenues, as compared to five licensees individually accounting for 30%, 13%, 10%, 10%, and 10% of revenues recognized during the third quarter of 2012. This points to higher dependence on a few clients for majority of the revenues. Diversity is important to reduce uncertainty and risk, especially in view of increased competition in the sector. There are patent assertion entities like Spherix (SPEX) which are working to increase the diversity of their patent portfolios. Several companies are more aggressive, and hence it is important for Acacia to diversify to smoothen the curve.
