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Cisco Shares Tumble On Lowered Guidance

Hans Vestberg, President and CEO of Ericsson, left, and Chuck Robbins, CEO of Cisco. Hans Vestberg, President and CEO of Ericsson, left, and Chuck Robbins, CEO of Cisco.
Hans Vestberg, President and CEO of Ericsson, left, and Chuck Robbins, CEO of Cisco. Photographs by Getty Images

Cisco and Ericsson may have signed a blockbuster partnership early this week to boost sales, but so far the stock market isn’t taking too kindly to the deal.

Shares of Cisco fell nearly 6% on Friday to $26.21. Meanwhile, shares of Ericsson had a rollercoaster ride on Friday after a report by a Swedish publication that claimed Cisco was trying to acquire the Swedish networking gear maker.

Ericsson’s stock briefly rose 6% in light of the news, but when Cisco (CSCO) denied the report, shares fell back down and closed at $9.24, a less than 1% drop from it’s opening price at $9.24.

On Tuesday, Ericsson lowered its financial guidance and saw its stock drop 6.3%. Cisco also lowered guidance on Thursday, and like Ericsson, got hammered by investors.

Cisco CEO Chuck Robbins attributed the lowered guidance to China’s weakening economy and its impact on neighboring countries. Whether Cisco’s big partnership with Ericsson helps improve Cisco’s financial outlook and vice-versa for the next year remains to be seen. So far, it seems that Wall Street remains ambivalent.

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