Mark Lister, head of private wealth research at Craigs Investment Partners, said some investors may have taken flight over concerns that a new party on the share register could dilute the value of Orion's existing shares.
"They (Orion) are obviously out there talking to others and one would assume that there are a couple of parties, or one at least, who might come on board," he said.
Lister said it was possible the market may have anticipated a rights issue that could allow a new party an attractive entry point.
"That's certainly factor (behind the weak share price) as well as the operational aspects," Lister said.
Orion, which specialises in building software for the healthcare sector, said its working capital facilities remained in place with ASB Bank, who remained committed to the company. The company said its talks with other parties remained confidential.
Salt Funds Management managing director Matt Goodson said the key questions facing investors were whether other parties were willing to invest, if so on what terms, and what the dilution would look like for existing investors.
Goodson said the "nature of the beast" was that some of Orion's contracts were large and complex.
Orion chief executive and majority shareholder, Ian McCrae, said operating revenue in the 12 months ended March 31 was probably between $194 million and $200m, down from $207m a year earlier.
The company's net loss was likely be between $32m and $38m, compared to a loss of $54.4m in 2016.
"Management takes full responsibility for not executing as efficiently on the sales pipeline as had been forecast," McCrae said.
"The delay in the finalisation of contracts is not attributable to a specific factor as every potential customer situation is unique," he said.
"Improved sales processes and forecasting are core areas of focus."
The company listed in November 2014 amid heightened investor interest in technology companies, but has since turned out to be one of the market's bigger disappointments.
On debut, the stock traded at $6.50 a share, up from its $5.70 offer price, and giving the company a market capitalisation of just over $1 billion.
At today's price, the company's market capitalisation was $265 million.
"It's been rough ride for investors over the last year or two," Craigs Investment's Lister said.
"They still have an exceptionally good product and have highly attractive long-term growth opportunities, but they just have not been able to deliver."
