$RXT dropped 26.67% today after issuing a preliminary Q2 miss and lowering guidance while trying to dress it up as an 'accelerated enterprise AI growth vector.'
This is why we look at the balance sheet over the press releases. When we backtest earnings-driven gap-downs of 20% or more, similar setups historically close red 54% of the time, meaning the initial morning sell-off rarely sees a miraculous midday recovery.
Instead of catching the falling knife on a structural guidance cut, the professional choice is to let the dust settle. The house wins on the chasers' impatience.