Why Xunlei Limited Stock Fell 18.8% in March
What happened
Shares of Xunlei (NASDAQ: XNET) dipped 18.8% in March, according to data from S&P Global Market Intelligence. The cloud and blockchain services stock slipped early in the month following the release of the company's fourth-quarter results and continued to lose ground as the first quarter of 2019 came to a close.
Xunlei stock had seen a big boost in February, with shares gaining 30% as the broader market rebounded from sell-offs at the end of 2018, but March brought about some reversal. Xunlei shares sold off after the company delivered another quarter of disappointing performance and no real answers to the question of how the business will reenergize its cloud service offerings and get things back on track.
So what
Xunlei reported its fourth-quarter results on March 7, with sales for the period falling 49% year over year and roughly 6.5% sequentially to land at $42.3 million. Investors holding out hope for an uptick of activity in the company's ailing cloud services business were left disappointed, as sales for the segment fell 8.5% sequentially. The company's operating loss for the quarter expanded to $32.4 million, worsening from the $15.9 million operating loss it posted in the prior-year quarter.
Now what
Xunlei stock has seen some positive momentum in April, trading up roughly 11.5% in the month's trading so far.
If Xunlei can launch new products and services that create demand for its cloud services, the stock could still post a rebound. However, for retail investors, there's very little window into where the business might be in that process, and recent performance has been providing some dire indicators.
The stock will likely continue to be volatile in the short term, and it's possible investors could see a bounce, but long-term investors should probably continue to avoid Xunlei.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.