The TecDax and Nasdaq Composite benchmark indices were able to maintain their levels despite large fluctuations within the quarter, as did the DAX. By contrast, Software AG stock lost 20.7 percent in value during the second quarter of 2008. As in prior months, a variety of factors contributed to the decline. Despite many “buy” recommendations from bank analysts who had calculated a fair value of approximately €60 for Software AG shares, investors were influenced by the general uncertainty of the markets and increasingly favored blue chips, leaving smaller IT stocks on their sell lists.
On April 7, 2008, Software AG shares reached their highest price for the second quarter at a level of €52.13. Following the publication of the financial figures for the first quarter of 2008, the share price fell by 6.8 percent. Many investors felt uncertain about Software AG’s ability to meet its ambitious forecast for 2008 as a whole. In particular, they were disappointed with the revenue growth in the webMethods business division. At the end of May, Software AG’s share price once again rose to just under €50, but was unable to maintain this level during the month of June. The quarterly closing price of €38.54 represented the lowest price for the entire second quarter of 2008.
With the publication of the half-year results on July 23, 2008, investor opinion improved again and the share price moved upward (closing price on July 31: €49.01). The increase in licensing sales in the webMethods division and in Brazil were the primary factors in establishing renewed confidence in the forecast for the entire fiscal year.
Our intensive investor relations work in the months of April, May, and June 2008 included eight road show events in Europe and the USA, two speed-investing conferences, and three other important conferences and forums. On April 29, 2008 we conducted our Annual Shareholders Meeting, which was held in the newly erected "darmstadtium" conference center in Darmstadt for the first time. With 450 participants, attendance was almost double that of 2007. As a result of this increase, our Annual Shareholders Meeting will be held at the "darmstadtium" in 2009 as well.
Once again, our investor relations work set industry standards and won several awards. Software AG took second place in the "Best IR in the TecDAX" performed by Thomson Financial and published by the German financial magazine Wirtschaftswoche. We also received second place in a ranking by Capital, another leading German financial magazine. In addition, in the "Online Investor Relations Benchmark" survey published annually by the German online media consultancy, NetFederation Interactive Media GmbH, Software AG’s Investor Relations website was awarded first place in the category "Best IR Website in the TecDAX."
Analyst coverage remained unchanged from the first quarter of 2008. There are 24 analyst firms covering Software AG’s stock; 19 of them gave a "buy" recommendation in the second quarter of 2008.