Ann: Profit Guidance, page-188

I am almost certain the reaction is not to the 8% drop in guidance. It is management behaviour:

- their PFS DD has proven to be almost non-existent
- they don’t have a handle on the numbers coming out of their own business (affirming guidance in mid-Feb, again in mid-Mar, then dropped it in April)
- the sale of shares by a director looks a bit smelly at best
- downgrades often come in threes, because if they get the figures wrong once, odds are they will overestimate their ability to steady the ship again.

So for all the people thinking “8% guidance drop, 35% share price drop, looks cheap!” I think they’re missing the reason for the selling. The market is forward-looking. EML has burned a lot of shareholder trust.

Thats my take, and hence the ‘Sell’ sentiment despite being a non-holder.

Cheers