Developments from Monday:
6:33AM Conexant (CNXT) 16 9/16: Company unveils a single chip which has both interactive TV and broadband net features.
Covista Communications (CVST: news, msgs) soared 49 percent as investors continue to applaud Friday's mid-session appointment of Henry Luken as chairman. The Little Falls, N.J., regional facilities-based provider of telecommunications services rose almost 100 percent on Friday after announcing the appointment of Luken, co-founder of Telco-EIC, where he was CEO, treasurer and chairman until the company merged with Excel in 1997. Shares closed up $1.91 at $5.78.
GTSI (GTSI: news, msgs) surged 41 percent after the Chantilly, Va., provider of government information technology services reported fourth-quarter earnings of $8.4 million, or $1.01 a share, up significantly from a year-ago profit of $1.8 million, or 19 cents a share. These reflect the adoption of SAB No. 101 accounting standards as mandated by the Securities and Exchange Commission. Revenue jumped to $234.9 million in the period from $199.2 million a year ago. The company noted in its earnings press release that its shares trade well below their book value of $7.35 a share, even in light of Monday's 25 percent gain. GTSI authorized a buyback program, calling for the repurchase of up to $4.7 million worth of its common shares. Shares closed up $1.66 at $5.75.
Redback Networks (RBAK: news, msgs) rallied 9.9 percent after the provider of broadband access services said it has entered into a "multi-year, multi-million dollar" agreement to supply Qwest Communications (Q: news, msgs) with its SmartEdge 800 optical platform. Qwest plans expand local broadband services in certain metropolitan areas for businesses and consumers. Shares closed up $4 at $44.25.
Harmonic (HLIT: news, msgs) lost 5.5 percent after the broadband equipment provider said it was cutting 100 jobs, or 10 percent of its workforce, which is expected to result in a charge of approximately $800,000 in the first quarter. The layoffs come as a result of a scale back in capital spending by some of its "major" customers. Shares fell 56 cents to close at $9.69
7:05AM Xerox Corp (XRX) 8.26: The WSJI reports that company officials met with leveraged buyout firm Texas Pacific Group to explore the sale of assets, according to a person familiar with the meeting. News of the meeting was first reported Friday by TheStreet.com.
7:25AM PurchasePro.com (PPRO) 25 1/8: Company calls negative article published in Barron's February 5 edition riddled with inaccuracies and innuendo. PPRO shares indicated 2 1/4 pts lower in pre-market. SG Cowen concurred, defending PPRO.
7:41AM Princeton Video (PVII) 4 3/4: Cablevision (CVC) to make a $10 mln investment in company. Cablevision also receives 3-yr warrants that will allow company to increase its ownership in PVI up to a total of 45% at an average strike-price of $ 9.00 per share.
7:54AM Informix (IFMX) 6 7/8: Dreyfus MidCap Value Fund manager Peter Higgins thinks software developer's shares could hit $20 by yr-end, according to article published in Sunday's New York Times.
7:56AM Impath (IMPH) 43 1/2: First Union upgrades to STRONG BUY from BUY believing that recent price decline creates a buying opportunity; firm maintains $82 target price.
7:59AM Chip Outlook : According to Lehman chip analyst Dan Niles, the Dec. SIA data showed that semiconductor revenue growth decelerated to 22% yr/yr and has decelerated in every month since the peak at 52% in Aug. Analyst continues to believe that semiconductor revenue growth will decline into negative comparisons by mid-2001.
8:19AM MicroStrategy (MSTR) 15 7/8: Announces that in Q4 of 2000 company entered into a multi-million dollar enterprise software license agreement with FleetBoston Financial.
8:30AM Cisco Systems (CSCO) 35 1/2: Morgan Stanley expects Cisco to report Q2 results that are in-line or slightly above firm's estimates; Morgan notes that it has reduced FY01 forecast twice, and currently has the lowest EPS estimate among analysts; firm maintains STRONG BUY rating and 12-month target of $50.... CSCO reports after-the-close tomorrow.
8:36AM Active Power (ACPW) 20 9/16: Merrill Lynch raises near-term rating to BUY from ACCUMULATE; believes lock-up expiration has contributed to recent weakness; while Merrill expects some selling from early-stage investors, does not think there will be huge blocks of stock coming to the market.
8:44AM Harmonic (HLIT) 10 1/4: Company to reduce its workforce by approx. 10% (100 jobs) as part of effort to bring costs more in line with current revenue levels.
9:32AM McDATA (MCDT) 53 3/8 -5/8 (-1.1%): Merrill Lynch believes that EMC distribution of 81 mln McData shares scheduled for Wed. could place pressure on the stock for the next week or two; firm says it would be a buyer at trough valuation levels.
9:51AM QLT Photother. (QLTI) 27 11/16 +1 15/16 (+7.5%): Receivs FDA approvable letter to expand the use of Visudyne (verteporfin for injection) therapy
10:19AM Juno Online (JWEB) 1 7/8 +7/8 (+87.5%): Issue rallies on speculation that Microsoft (MSFT) could make a bid for the Internet service provider. As mentioned Friday, EarthLink (ELNK 8 5/8 -11/32) also seen as a potential takeover target.
11:17AM Speechworks Intl (SPWX) 28 15/16 +1/2 (+1.8%): Stock trading up this morning after UBS Piper Jaffray reiterates BUY rating and price target of $55.... Company and partner Metel launch first Korean speech recognition service for stock trading; firm believes that SPWX achieves continued traction through partners and in international markets.
11:49AM Cisco Systems (CSCO) 33 15/16 -1 9/16 (-4.4%): -- Update -- Technical -- Holding above intraday support at 33 11/16 but the lack of a more aggressive turnaround this morning suggests vulnerability. A break of the above barrier suggests the bounce is corrective and opens the door to initial support at 32 5/8 with a major support at 31 15/16 (Jan 03 low).
12:49PM CIENA Corp (CIEN) 81 7/8 -1 1/8 (-1.3%): Hearing that Ciena's 8 mln share secondary and $500 mln convertible offerings will price night. The size of the convertible was raised from $350 mln. Underwriters:Goldman Sachs, Morgan Stanley, B of A, and Robertson Stephens.
1:10PM Intel (INTC) 33 11/16 -2 (-5.6%): Intel Corp (INTC) announces agreement to provide Cisco Systems (CSCO) with flash memory for a variety of Cisco communications technologies, including cable modems, desktop switches and low-end routers. Deal seen as a negative for Cisco chip suppliers such AMD.
1:15PM Intel Fallout : Broadcom (BRCM 90 11/16 -8 7/16) and Silicon Storage (SSTI 11 15/16 -1 1/16) are also suppliers of chips to Cisco Systems.
2:03PM Cisco Systems (CSCO) 34 1/16 -1 7/16 (-4.1%): -- Update -- Dresdner Kleinwort Wasserstein downgrading to ADD from BUY on belief that revenue growth guidance will be lowered significantly during Q2 conference call; firm reducing its 2001 EPS to $0.73 (mean $0.78) and 2002 to $0.93 (mean $1.00).
3:15PM Micromuse (MUSE) 76 3/8 -6 3/8 (-7.7%): Bear Stearns blaming selloff on rumors company experienced a weak Jan. qtr; firm says channel checks confirm that MUSE had a good start to the qtr; Bear Stearns is comfortable with March forecast and says it is not worried about insider selling.
3:24PM MP3.com (MPPP) 4 3/8 -1/4 (-5.4%): TechWeb reports that MP3.com will be the sole provider of music applications in the initial version of Qualcomm's (QCOM) new Binary Runtime Environment for Wireless (BREW). The technology will allow subscribers to download music to their Brew-enabled handsets. (volume 707K; intraday high 4 23/32; float 20.5 mln).
3:39PM Xilinx (XLNX) 51 1/2 -1 9/16 (-2.9%): Chip maker to post monthly update on its web site after the close. Hearing that update is likely to be cautiously negative.
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