Fusion-io Plummets After Getting Downgraded

Shares of Fusion-io (NYSE: FIO) dropped on Tuesday after an analyst downgraded the company. William Blair Analyst Jason Ader cited slower-than-expected bookings as the key reason for his downgrade.

Fusion-io has been a wild stock over the last few years, swinging from lows near $15 per share to highs around $40. The company has a market cap around $2 billion and about one quarter of shares are sold short.

The company's business centers around solid state memory, which has been an area of growth for the tech industry in recent years. A key component of Intel (NASDAQ: INTC) ultrabooks are solid state drives, which has fueled the demand for solid state memory.

Unlike a normal hard drive, a solid state drive is significantly smaller. They are also much faster at reading and writing data.

In addition to increasing demand for solid state drives, Fusion-io has been a popular rumored takeover target. Both Dell (NASDAQ: DELL) and EMC (NYSE: EMC) have been mentioned as potential suitors, although nothing concrete has ever emerged.

Shares of Fusion-io traded down nearly 10 percent on Tuesday, around $19 per share.