The stock price of medical imaging software vendor Merge Healthcare Inc. fell 40 percent in morning trading on May 8 as the company announced changes to its business model and failed to meet expectations in the first quarter of 2012.
Revenue rose nearly 16 percent to $61 million, but investors had expected $64.7 million, and earnings per share of 3 cents were a penny less than expected. Those numbers, combined with news of splitting the company into two divisions, a change in operations “being driven by our clients’ purchasing requirements for subscription-based pricing to align more closely with their long-term operating plans,” was enough to make many investors flee.
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