The QANTM Intellectual Property Ltd (ASX: QIP) share price has been one of the worst performers on the market today.
At the time of writing the intellectual property company's shares are down a massive 28% to $1.21.
What happened?
During its first-half results the company noted the historic seasonality in its service charge revenue and the soft demand for its legal and advisory services.
Unfortunately since then things have not improved, rather they have got worse.
According to the release legal and advisory service charges remain below the prospectus forecast level.
Furthermore, the company has seen an unexpected decline in patent prosecution activity and a slight weakening in Australian patent filings versus the last corresponding period.
Whilst the company has worked hard at reducing its full-year operating expenses by approximately 7% ($6 million) to compensate, management has still had to downgrade its full-year guidance.
Previous full-year revenue guidance of $112.1 million has been downgraded to between $100 million and $102 million.
And full-year EBITDA guidance of $27.5 million has been revised down to $22 million and $24 million.
Unsurprisingly rival IPH Ltd (ASX: IPH) has seen its share price tumble around 4% on the news.
Should you buy the dip?
Management appears confident that trading conditions will soon improve, which does make it a tempting investment option considering the reduction in operating expenses.
But I think the prudent thing to do at this point is to hold off an investment in QANTM, IPH, and Xenith IP Group Ltd (ASX: XIP) until there is a clear sign of improvement in the industry.
