EightBlack.

In the last week, the stock for the digital “allspark” has fallen from 99 cents to 76 cents. That’s close enough to 23%. In a week! Apparently, insiders were touting that if the share price fell below the psychological buck mark, there would be “blood on the streets”.

It must be flowing now.

The most recent article in the SMH just over 7 days ago said,

Bluefreeway hits the skids, now below $1

The news came after Julian Mulcahy, an analyst at Citigroup, slashed his target price for the stock to $1.36 from $2.10 and cut his 2008 profit forecast for the company by a third.

“BlueFreeway will struggle to post an interim profit,” he wrote in a note to clients on Friday.

Its shares fell 16c, to 99c, yesterday, closing below $1 for the first time, having hit 95c. The stock had already slid 25 per cent last month.

I called the analyst at Citibank, Julian Mulcahy, to see if he would talk to me about Bluefreeways’ further rapid descent (which he politely declined), but it’s sort of understandable as the poor guy has just got to work this morning with the news overnight that his own sky has started to fall in. Citibank has its own set of woes and is reeling from a quarterly loss of $10 billion and write downs of $20 billion.

That’s real money. Even for Citibank.

But back to Bluefreeway. This gig is going to get harder to sell. And harder to raise further capital to acquire more assets. No street smart owner of a digital group is going to want “equity” in a new world order company whose share price has plummeted like a falling anvil.

The smartest guys in all this are guys like Dominic Carosa, from Destra. He sold his hosting company to Bluefreeway for $20 million - $18 in cash and $2 in stock.

Now thats smart.

Image courtesy Asterix & Obelix, Underzo

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This entry was posted on Wednesday, January 16th, 2008 at 9:58 am and is filed under News, Predictions.... You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.