Digital River (NASDAQ:DRIV) Misses Black Friday, Estimates Lowered

While Digital River (NASDAQ:DRIV) should do well in the longer term, but short-term they're taking a hit because of the decision to wait to work with Microsoft's (NASDAQ:MSFT) online store.

Instead they decided to wait in order to integrate additional functionality to the store, which is now expected to be operational in the early part of 2011.

Wedbush noted, "The company intends to offer $250 convertible notes due 2030 with a proposed coupon range of 2.25-2.75%. The company intends to use proceeds of $35 million to repurchase shares. We estimate the remainder could be used to target tuck-in acquisitions. The company expects $0.02-0.03 dilution in 4Q10 as a result of the additional 40 million outstanding shares for Q4."

EPS estimates for the fourth quarter 2010 were lowered from $0.30 to $0.28 and revenue estimates from $97 million to $95 million.

Wedbush maintains an "Outperform" rating on Digital River, which closed Thursday at $36.37, falling $1.68, or 4.42 percent. They have a price target of $42 on them.