BlueFreeway (BLU) fell by 16 cents to 99 cents yesterday as concerned investors sold the shares down in droves fearing the company may post a half-year loss after the sudden departure of director David Smithers.
Falling below the $1 mark is another blow for the digital marketing company in a short space of time, with BlueFreeway falling by a significant 25% just last month.
The company released a blunt statement yesterday afternoon announcing the resignation, but clearly lacking was any explanation why.
Mr Smithers, who is also chairman of Rabobank Australia, only joined the company less than three months ago as non-executive director.
The Sydney Morning Herald reveals that news of the resignation came after Citigroup analyst Julian Mulcahy 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," Mr Mulcahy wrote to clients on Friday.
"Evidence that the company is on the right track is needed for a rebound."
On Friday BlueFreeway released a Strategic Update that said the company had invested $5.3 million on three strategic investments – in technology and a global sales and marketing team – that would cut into the first-half result.
No profit forecast was included in the update, but BluFreeway said the full-year earnings guidance would be released in February.
"It remains to be seen whether management can pull it all together," Citigroup said.
At 11:00AM AEST today BlueFreeway had fallen even further, with a loss of 4 cents down to 95 cents.
