Services

How Can InterCloud’s Gains be Rationalized?

Cloud computing
Thinkstock
Cloud-based software service provider InterCloud Systems Inc. (NASDAQ: ICLD) has had a rough time since an initial public offering at $4 a share on October 31st. The shares had been trading over-the-counter at between $6 and $7 before the IPO, which priced below the expected range of $5 to $7.

The shares slid further to a post-IPO low of $2.20 and closed at $2.55 before InterCloud announced its third quarter results after the markets closed Thursday night. The numbers were unexpectedly huge and the shares are up about 250% on Friday.

Revenue was up more than 400% year-over-year and earnings per share rose from a loss of $2.16 in the third quarter of 2012 to $0.12 this year. Gross profit rose more than 400% as well.

So what gives? The company was incorporated in 1999 and has only expanded rapidly since 2010 when it merged with a company called Digital Comm Inc. The company’s stock price in March was $3.35 a share following a 1-for-125 reverse stock split effected in January. Another 1-for-4 reverse split was held in August, raising the share price from around $2.70 to $11.00. Since then, shares have trailed off to last night’s $2.55 close.

Investors must have believed this morning that they are looking at an $11 stock priced at an unbelievably low price. Maybe that’s true and maybe it isn’t, but it’s certainly too soon to make the call.

Shares of InterCloud are trading at $9.91, up nearly 290% from Thursday’s closing price of $2.55. The stock’s 52-week range is $2.20 to $36.00. The high end of that range must have come when the company was still known as Genesis Group Holdings Inc.

Cash Back Credit Cards Have Never Been This Good

Credit card companies are at war, handing out free rewards and benefits to win the best customers. A good cash back card can be worth thousands of dollars a year in free money, not to mention other perks like travel, insurance, and access to fancy lounges. See our top picks for the best credit cards today. You won’t want to miss some of these offers.

 

Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.