Digital River‘s stock went over a waterfall today, with investors bailing on the e-commerce company after it announced it’s losing its largest customer. The Eden Prairie company’s stock dropped nearly 40 percent this morning on news that anit-virus software maker Symantec will build its own system after its Digital River deal expires in June 2010.
“We are surprised and deeply disappointed that Symantec has chosen to move to an internally developed system, but we remain very confident in the future of our business,” Digital River CEO Joel Ronning said in the company’s statement.
One analyst tells the Wall Street Journal that investors are probably overreacting. Symantec accounted for more than 25 percent of the company’s revenue last year, but Digital River has been growing steadily and diversifying into areas that are likely more profitable than the Symantec business, said Kerry Rice of Wedbush Morgan. “I don’t believe they turn off the spigot tomorrow and there’s no revenue,” he said.