Virgin Mobile USA Shares Fall As Much As 54 Percent On Disappointing Earnings

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Yesterday we reported on Virgin Mobile USA’s (NYSE: VM) Q4 earning results, and on lower subscribers additions, its stock is being hammered today on NYSE. It fell as much as 54 percent to $2.30 earlier today, and as of this writing is about $2.45…this is still drastically down from its October 2007 IPO price of $15 a share.

Many analysts have also cut the stock rating, reports Reuters. “With 2 quarters in a row of disappointing guidance we believe that the softening economy and increased competition have eliminated management’s ability to forecast its business,” said Bear Stearns analyst Phil Cusick in a client note.

Also, Stanford Group analyst Michael Nelson said he had expected Virgin to add 130,000 customers in the first quarter. “We believe Virgin Mobile is losing share of the prepaid market, owing to intense competition from national and regional carriers,” said Nelson.

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Former employee

Also found out today from an insider that their IT HQ in Walnut Creek, CA will be closing down and all of their IT function will be outsourced to IBM. IT services are expensive and if they are not making money, they cannot afford to keep their IT folks. A tell-tale sign of a company getting tanked.

kimbo

54% is OUCH.

Branson and Sprint already got their money out, so it's really the poor sods' that are left holding the bag…

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