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July 15, 1999 20:41
Newbridge stock bounces back after earlier drop
TORONTO, July 15 (Reuters) - Newbridge Networks Corp. stock regained some height on Thursday after having its wings clipped earlier this week by apparent misinterpretations of an analyst's comments.
"The word has gotten out enough, after a couple of days, there's enough people who are looking at the stock and said it can't be bad," said Patrick Houghton, of Sutro & Co. in Los Angeles.
Shares in Newbridge, which makes telecommunications and computer equipment, climbed C$3.40 or nearly 9 percent to close at C$41.60 on the Toronto Stock Exchange on Thursday.
On Tuesday, the stock dropped as low as C$36.55.
Newbridge spokesman Paul Goyette said company officials have been trying to clarify the situation for the past two years.
On Tuesday, New York-based analyst Paul Silverstein at BancBoston Robertson Stephens said the stock's sell-off was the result of a "Chinese Whispers" corruption of a comment he made to his sales force. "All I said was that against the backdrop of a strong start to the quarter, that I believe that demand weakened in July," Silverstein said on Tuesday.
"We are not cutting our numbers. We are not cutting our rating and I am not saying that they are not going to make the numbers," Silverstein added on Tuesday.
"I think the quarter is on track -- I don't see what the big excitement was," Houghton said on Thursday. "We were buyers of the stock earlier in the week ... when the people were panicking."
($1=$1.48 Canadian)
((Reuters Toronto Bureau (416) 941-8109 or toronto.newsroomreuters.com ))
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