The company on Wednesday missed profit estimates and remained mum on future expectations.
Shares closed down $5.98, or 22.5 percent, to $20.60.
Macromedia makes Web design and development software, including multimedia-playback and graphics-development tools.
Macromedia fell far short of estimates in its fourth quarter Wednesday, earning $8.4 million, or 16 cents a share, on sales of $89.1 million. The company also announced that it laid off 200 employees in the quarter. First Call consensus had been for a profit of 20 cents a share in the quarter.
But worse than missing numbers was the company's refusal to say a word about its outlook. That was the main beef of analysts who downgraded the stock or lowered its rating Thursday. Some also pointed out that the company is having a tough time integrating its recent acquisition of development-tool maker Allaire.
The lack of guidance "spooks investors," said Jonathan Rosenzweig of Salomon Smith Barney, who lowered his ratings for 2002 from $1.25 to 90 cents a share despite the fact that the company gave no guidance. The analyst maintained his "outperform" rating but cautioned that "expectations are likely to be broadly reduced."
Other analysts were less forgiving.
Tucker Anthony's Aaron Scott cut his rating on the stock to "market perform" from "buy" and recommended a "hasty retreat for current shareholders."
Investors who want to remain in the Web infrastructure universe would be better served by investing in Adobe, he added.
Moors Cabot analyst Ed Bierdeman also reduced his rating--from "buy" to "hold"--and while he remained optimistic about the company's long-term prospects, said that in the near future he was "concerned by deteriorating revenue growth and management's inability to produce guidance."
Analysts also expressed concern about the company's merger with Allaire, which had shopped itself around for almost a year before finally finding a buyer in Macromedia. On a conference call, management was upbeat about integration, but analysts were skeptical. This isn't the first time analysts have expressed concern about the Allaire merger--most have been pessimistic about the deal since it was first announced.
Macromedia "may be realizing that the purchase of Allaire was not such a wise decision," and that the company may be "riddled with unanticipated problems," Scott wrote.
With the exception of the integration of Allaire's product lines, Scott noted that the companies have no "clear strategy."
The Allaire integration may even be the cause of Macromedia's inability to give projections. "We believe management's lack of visibility is exacerbated by the Allaire acquisition," wrote Thomas Weisel Partners analyst R. Keith Gay, who lowered his estimates on Macromedia Thursday.
"Integrating Allaire would be a challenge in the best of times, much less during one of the worst software-sales environments of recent years," Gay added.