Rediff.com Plummets after Q3 Results

Shares of Rediff.com

are under much pressure during Wednesday's pre-market session after the company reported third quarter earnings which failed to impress investors. According to Rediff.com, India online revenues remained at the same level sequentially and declined by 7% on a year on year basis in rupee terms. However, a 14% decline in the Indian Rupee compared to the US dollar is reflected in a decline in India online third quarter revenue by 18% on a year on year basis in dollar terms. Further, third quarter US revenues remained at the same level sequentially and declined by 19% on year on year basis. On a positive note, Rediff's cash balance stood at $25.0 million, as of December 31, 2011, and the company continues to invest approximately $2.0 - $2.5 million per quarter in its business. With current cash on hand, Rediff believes that it has sufficient working capital to meet its liquidity needs and to execute on company strategy, including investments in product development, sales diversification and the entrance into new markets. However, investors are unimpressed with the quarter as shares of Rediff are currently trading lower 16% at $7.38.