Wall Street hammered beleagured Informix Corp’s shares even further yesterday on news the company’s first quarter may turn out to be even more dismal than it warned last week (CI No 3,131). The company’s end-of-year filings with the US Securities & Exchange Commission reveal that 50% of the $354m product licenses it booked as OEM business – worth some 18.8%, or $177m of the company’s $939.3m 1996 revenue – was left sitting on its resellers shelves at the end of the year, leaving it with a gaping re-order shortfall to make up in the first quarter. Merrill Lynch & Co immediately cut its long-term rating on the stock – but only to accumulate from buy. The shares, which finished up at $8.625 on Wednesday night, opened at $7.75 on Thursday morning and immediately dipped to $7.00, climbing to close at $7.3125. Its high for the year is $31.125. Wall Street analysts were speculating that the company would make an attractive acquisition candidate at the $15-to-$20 per share mark but only if its stock were to fall below the $5.00 barrier. Informix said last week it expects revenue for the first quarter to March 30 to be in a range of an embarrassingly low $130m to $145m compared with $204m in the year-earlier period; the suggestion now is it might be even worse. Informix management was said to be refusing to take calls on the subject. The company originally blamed its first quarter revenue warning on a range of factors including weakness in Europe, failure to close large Unix orders, lack of focus on Windows NT and an over-emphasis by its sales and marketing team on emerging object-relational technology. Before 1996 the company had been reducing its focus on OEM and distribution channels but it rose again in 1996 to be worth some 50% of all license revenue, which accounted for 75% of overall revenue. Morgan Stanley didn’t buy Infromix’s party line at the time of its first quarter revenue warning, declaring the shortfall was too large to blame on a few slipped deals or general weakness in Europe. In our opinion, to miss the revenue line by $100m, or nearly half, there must be a strategic mis-step or at least a planning assumption that’s been called in to question. Informix has moved its reporting date back to the end of the month from next week. Analsyts were expecting rival database companies Oracle Corp and Sybase Inc to make hay on the news.