What Happened?
Shares of work management software maker Asana (NYSE: ASAN) fell 30.3% in the pre-market session after the company reported weak fourth quarter results: Revenue was just in line and revenue guidance for both the upcoming quarter and full year missed. Also, Dustin Moskovitz, the CEO of Asana and one of the original co-founders of Facebook, announced his intention to retire. Overall, this was an underwhelming quarter, especially as the market continued to rotate out of premium-priced tech.
The shares closed the day at $12.64, down 24.4% from previous close.
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What The Market Is Telling Us
Asana’s shares are extremely volatile and have had 32 moves greater than 5% over the last year. But moves this big are rare even for Asana and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 15 days ago when the stock dropped 8.4% as markets continued to struggle following the broad selloff triggered by weak economic data in the previous week. On Friday, February 21, 2025, the S&P 500 dropped 1.7%, and the Nasdaq fell 2.2% after PMI numbers showed the U.S. services sector contracted, and the University of Michigan's consumer sentiment index came in below expectations.
Adding to Wall Street's anxiety, rumors swirled that Microsoft wa trimming some data center projects, raising concerns that AI-related investments may get a little too bloated.
TD Cowen analyst Michael Elias flagged three key findings from his research. He noted that Microsoft "1) cancelled leases in the U.S. totaling 'a couple of hundred MWs' with at least two private data center operators, 2) has pulled back on the conversion of SOQ's to leases, and 3) has re-allocated a considerable portion of its international spend to the U.S."
Jefferies analysts saw this as more of a regional spending adjustment, adding that Microsoft executives "strongly refute" any major shift in their data center strategy.
Asana is down 36.1% since the beginning of the year, and at $12.69 per share, it is trading 53.9% below its 52-week high of $27.52 from December 2024. Investors who bought $1,000 worth of Asana’s shares at the IPO in September 2020 would now be looking at an investment worth $440.63.
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