Shares of Credo Technology Group Holding Ltd.
plummeted TK% toward a four-month low, putting them on track to suffer a record one-day selloff a day after closing at a record high, after the networking company disclosed that its largest customer cut demand for Credo products. The previous record one-day drop in the stock, which went public in January 2022, was 11.9% on March 14, 2022. The company said in an 8-K filing with the Securities and Exchange Commission late Tuesday that it understands the reasons for its largest customer cutting purchases “are unrelated to Credo’s performance.” According to the company’s annual report for the fiscal year ended April 30, 2022, the largest customer accounted for 30% of total revenue. As a result of the customer’s decision, as well as macroeconomic headwinds, the company now expects revenue for the fiscal fourth-quarter through April. 29 to be $30 million to $32 million, which was well below the FactSet consensus as of Jan. 31 of $58.3 million. The company also expects revenue for the fiscal year ending April 2024 to be flat with revenue for the year ending April 2023, while the FactSet revenue consensus as of Jan. 31 called for 48% growth. The stock had soared 26.0% over the past three months through Tuesday, when it closed at a record $19.36, while the S&P 500
had gained 3.6%.