DragonWave, Inc. (USA) (NASDAQ: DRWI)
DragonWave is having an incredible day in the market today, and for good reason. The company made a big announcement today with regard to its relationship with Sprint. Today, we’ll talk about the announcement, how the stock reacted to the news, and what we can expect to see from DRWI ahead.
DRWI Gains Big On Sprint News
As mentioned above, DragonWave is having a strong day in the market today, and for good reason. The company announced that its microwave backhaul equipment for network deployment has been chosen by Sprint as part of the company’s densification and optimization strategy.
This is incredibly strong news for obvious reasons. DRWI is a relatively small company in the world of tech, and Sprint is massive. So naturally, the fact that Sprint has chosen the company’s technology to bring in as part of its strategy will likely lead big gains in revenue and earnings.
Along with the news, key figures at both Sprint and DragonWave made statements. Here’s what they had to offer…
“We look forward to continuing our work with DragonWave as part of our densification and optimization strategy… Microwave backhaul is a cost-efficient, reliable alternative when used in the right ring structures, and it’s a key part of the extension of our overall toolkit as we work to provide customers with more consistent coverage, better reliability, and even faster data speeds.” – Gunther Ottendorfer, COO of Technology at Sprint
“DragonWave is pleased to extend our relationship with Sprint, and we know that we can bring unique performance advantages that can be leveraged in its network densification efforts… We look forward to supporting Sprint’s growth and expansion by delivering on our commitment to provide unmatched product performance, reliability and support.” – Peter Allen, President & CEO of DRWI.
How The Stock Reacted To The News
As investors, one of the first things that we learn is that the news moves the market. When positive news is released, we can expect to see gains. Of course negative news will lead to declines. In this particular case, the news released was overwhelmingly positive. As a result, the reaction in the market is incredible. Currently (12:48), DRWI is trading at $4.33 per share after a gain of $2.12 or 95.86%.
What We Can Expect To See Moving Forward
Moving forward, I have a an overwhelmingly bullish opinion of what we can expect to see from DragonWave. At the end of the day, the deal with Sprint is overwhelmingly positive news. Not only will the deal likely bring in large amounts of revenue and earnings, it further validates the company’s work in the space. At the end of the day, DRWI has an incredible product that has now been picked up by Sprint, and that’s likely to lead to big gains ahead.
With all of that said, big movement in the market like this tends to happen through a series of overreactions. So, I wouldn’t be surprised to see a correction coming soon. The best thing to do here may be to wait for the dip and buy DRWI at the bottom to take advantage of the next big trend.
What Do You Think?
Where do you think DRWI is headed moving forward? Join the discussion in the comments below!