Corporate flash drive manufacturer Fusion-io Inc. (FIO) probably best known for being the employer of Apple co-founder and overall computer geek-god Steve Wozniak reported dismal third quarter earnings on Oct 24, and at the same time announced their CFO was leaving the company. The earnings miss is a capper on what has been a rough year, as investors fall out of love with this once hot tech stock.
While the company has lost money three quarters in a row, what most worries investors is the dismal guidance and internal turmoil that has become visible from the outside. Half of Fuison-io’s revenue comes from Facebook Inc. (FB) and Apple Inc. (AAPL) , who have been the principal buyers of the company’s mammoth flash data storage devices. However, their purchases are expected to drop off significantly as their storage needs are being met, leaving Fusion-io without a reliable large scale buyer.
The company is also experiencing several shakeups. While the departure of the CFO is the most recent, the company has also announced the departure of executive VP James Dawson, and their CEO and co-founder Rick White quit in May.
Once a favorite of investors, Wall Street has soured considerably on the tech company. Shares have lost near two-thirds of their value since the start of the year and 19.93 percent of Fusion-io’s shares are currently being shorted.
The company hired on the tech darling Wozniak in 2009 as Chief Scientist, sparking considerable investor interest in the company. The company was valued at $2 billion after a massively successful IPO in 2011, though that goodwill has evaporated as the company fails to find a consistent revenue stream.
For the third quarter, Fusion-io posted a loss of $27.9 million, or -$0.28 per share on revenue of $86.3 million. The same quarter last year, the company posted earnings of $3.9 million, or $0.04 per share on revenue of $118.1 million. Analysts had been expecting as loss of $0.10 per share on revenues of $85.2 million.
Fusion-io tanked on the news, losing 25.73 percent of its value to hit $9.63 a share in midday trading.