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Update: Datawatch's Inadequate Strategy Shift At Earnings Puts The Name On Long-Term Bankruptcy Watch

Datawatch Corporation (DWCH) continues to be an avoid or a short position following its FQ1/2015 earnings. As detailed in a 2,684-word initiation article, DWCH has significant existential concerns and had to have an impossibly good conference call in which it addressed these concerns for the thesis to change. Unfortunately, for those still long DWCH or long prior to earnings, it did not.

DWCH reported expected poor financial results (SOURCE: DWCH FQ1/15 PR) but it was the announcement of its new marketing and sales strategy that should have longs particularly concerned:

  • Total revenue for its first fiscal quarter of 2015 ended December 31, 2014 was $6.96 million, a decrease of 21% from revenue of $8.81 million in the first quarter a year ago.
  • License revenue for the first quarter of fiscal 2015 was $3.18 million, a decrease of 42% from the $5.43 million recorded in the comparable quarter a