Diamonds and Dogs
7/19/12Ignite Restaurant Group Inc. (IRG)
Ignite Restaurant Group imploded today, crashing into the red, down 20.75% at $15.11. The company saw its shares get burned today after announcing a restatement and accounting review. Ignite Restaurant determined it necessary to correct non-cash related errors related to its accounting treatment of certain leases. The owner of restaurants such as Joe's Crab Shack, leases 100% of its properties and calculated lease rates incorrectly since its start-up in 2006. Ignite calculated lease rates without a fixed rate increase over the life of the lease, which will lead to an increase in the deferred rent liability for the company. Furthermore, this problem led to a decrease in 2nd quarter revenues; with the company estimating $119.9 million versus analysts' estimates of $120.9 million. Poor accounting principles will force Ignite to answer to many "crabby" investors.
Mellanox Technologies Ltd. (MLNX)
Mellanox Technologies investors aren't feeling melancholy today, with shares up 41.09% at $93.66. The semiconductor company saw a huge increase in its share price after it posted second-quarter results that obliterated Wall Street's estimates. The Israel-based company said earnings per share rose 267% from a year earlier to 99 cents, when analysts were expecting 74 cents. Sales soared 111% to $133.5 million, topping Wall Street's target of $128.3 million. Mellanox also guided Q3 sales estimates sharply higher. At the midpoint of its guidance, Mellanox expects current-quarter sales of $152.5 million, up 124% from Q3 2011. Analysts were modeling for sales of $105 million. Mellanox smashed its previous 52-week high by double digits and was up over 100% year-to-date (not including today's +40% bounce).
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