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My feeling is that the price had risen expecting a more stellar result or bullish guidance. When the street didn't get that they took their profits and ran. Y

My feeling is that the price had risen expecting a more stellar result or bullish guidance. When the street didn't get that they took their profits and ran. You can watch the same thing happen to CRM and ZM now in the days leading up to their next earnings call.

spoonjim 6y ago
What does it mean “the street took their profits and ran”? Who did they sell the stock to?
- aaomidi 6y ago
  To buyers who had placed orders way lower than what the stock was worth.
- nostrademons 6y ago
  Folks like the OP who believe CloudFlare is a good long-term buy but weren't paying attention before the earning's announcement. There's usually some subsegment of investors that believe that earnings are going to be really good, bid up the price beforehand, and figure they'll sell after earnings. If that group is smaller than the folks who see the earnings and figure it actually is a really good buy that they want to own, you get a stock pop after earnings. If the former group is larger than the latter, you get a stock drop. This cycle the former was bigger than the latter for CloudFlare. It's gone the other way both other cycles for CloudFlare and this cycle for other stocks. (Google and Disney, for example, got large after-hours pops after earnings.)
  - ac29 6y ago
    Sure but most volume is already institutional, and especially during after hours, there is nearly no retail activity. So, if "the street" took their profits after the earnings release, a different part of said street was buying.
- csomar 6y ago
  Traders to other investors. Usually Wall Street traders have some valuation model based on revenue. If the target isn't met, that reduces their model's price. Some people are less sophisticated and will just buy CloudFlare because they want to buy into the company. It's also possible that the price just adjusts to the new level (though usually there is some volume at every pip)

spoonjim 6y ago

What does it mean “the street took their profits and ran”? Who did they sell the stock to?

aaomidi 6y ago
To buyers who had placed orders way lower than what the stock was worth.
nostrademons 6y ago
Folks like the OP who believe CloudFlare is a good long-term buy but weren't paying attention before the earning's announcement. There's usually some subsegment of investors that believe that earnings are going to be really good, bid up the price beforehand, and figure they'll sell after earnings. If that group is smaller than the folks who see the earnings and figure it actually is a really good buy that they want to own, you get a stock pop after earnings. If the former group is larger than the latter, you get a stock drop. This cycle the former was bigger than the latter for CloudFlare. It's gone the other way both other cycles for CloudFlare and this cycle for other stocks. (Google and Disney, for example, got large after-hours pops after earnings.)
- ac29 6y ago
  Sure but most volume is already institutional, and especially during after hours, there is nearly no retail activity. So, if "the street" took their profits after the earnings release, a different part of said street was buying.
csomar 6y ago
Traders to other investors. Usually Wall Street traders have some valuation model based on revenue. If the target isn't met, that reduces their model's price. Some people are less sophisticated and will just buy CloudFlare because they want to buy into the company. It's also possible that the price just adjusts to the new level (though usually there is some volume at every pip)