Sandvine Stock Tanks – Comcast To Blame?

Sandvine Corporation, whose traffic shaping hardware is responsible for the packet shaping non-sense that the FCC is investigating Comcast over, tanked yesterday to a new low of $1.55 on the Toronto Stock exchange. That’s a drop of 42%. There’s a bunch of factors at work here:

  • The company warned yesterday that sales for its first quarter ended Feb. 29 will be about $8.2-million, plummeting 88% from a year earlier.
  • Full fiscal year revenue for Sandvine will be between $80-million and $85-million, down from the range of $100-million to $110-million estimated in December. That means annual growth of just 15%, compared with 132% a year earlier.
  • The FCC is looking at Comcast in terms of it violating its net-neutrality rules. Comcast is rumored to be Sandvine’s largest customer.

All of these will send investors heading to the exits.

Is this a long term thing? I doubt it. Just for giggles, lets say that a Democrat gets elected as President of the USA and the congress and senate fall into Democratic hands. There’s ZERO chance that the you will see any legislation that bans the use of this gear if that happens. Nor will a Republican president do anything similar. The problem is not the gear. It’s how it’s being used. But I do think that some ISP’s are going to think twice about buying and deploying this gear just because of the bad press that it generates (just ask Comcast). Perhaps some of them already have. Take a look at their press release section. Very few press releases have any names of companies that buy their gear. Not to mention that they’ve posted a document on net-neutrality that puts an interesting spin on the subject.

This one is worth watching.

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