C-Cube Microsystems Gains on Sales, Takeover Optimism (Update1)
Bloomberg News
June 11, 1999, 1:53 p.m. PT
C-Cube Microsystems Gains on Sales, Takeover Optimism (Update1)
(Updates with closing share price.)
Milpitas, California, June 11 (Bloomberg) -- C-Cube
Microsystems Inc. shares rose 12 percent on optimism that sales
at the No. 1 maker of digital video chips will top forecasts and
the company may be a takeover candidate.
C-Cube rose 3 1/2 to 31 15/16. Its shares have more than
doubled from a 52-week low of 13 1/4 on Oct. 8. Options to buy C-
Cube shares at 30 were the second-biggest gainers in U.S.
markets.
C-Cube designs chips for digital video disk players and
encoders for satellite TV systems and television set-top boxes.
Analysts expect sales in those markets to rise and say C-Cube is
positioned to benefit.
''We are greatly impressed with its technology, and business
is good in a quarter that is traditionally soft,'' said Dan
Scovel, a Fahnestock & Co. analyst, who rates C-Cube a ''buy.''
Milpitas, California-based C-Cube also has been subject to
speculation that it might be acquired, Scovel said. That may be
playing a part in the recent share activity, he said.
''It's always possible and not completely unlikely,'' Scovel
said. ''There have been rumors before.''
C-Cube officials declined to comment on takeover
speculation.
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