==EBAY, NSM, SNDK,====
EBay Shares Climb Amid Optimism for Demand as Holiday Season Approaches
By Anne Pollak
EBay Shares Rise on Optimism for Strong Holiday Sales (Update1)
(Updates shares, adds other Internet stocks in 5th
paragraph, analyst comment in 13th paragraph.)
San Jose, California, Sept. 10 (Bloomberg) -- EBay Inc.
shares rose 9.4 percent on optimism that demand for the No. 1
Internet auctioneer's service is growing heading into the holiday
shopping season, analysts said.
EBay gained 13 9/16 to 158 and earlier reached 159, the
highest since June. The shares have doubled in the past month.
EBay first sold shares to the public in September 1998 at $18 and
in March split the stock 3-for-1. The shares peaked at 215 in
April.
The company runs the most-visited Web auction service, far
ahead of rival auctions run by Yahoo! Inc. and Amazon.com Inc.
While eBay has been plagued by computer breakdowns in recent
months, that hasn't caused a drop in traffic or listings on its
site, analysts said. Some analysts say eBay will benefit as
online commerce surges before the winter holidays.
''They really have sticking power,'' said analyst Alan Mak
of Argus Research, who rates the shares ''hold.'' ''EBay has a
lot of momentum behind them in terms of user growth.''
Shares of other online retailers also rose today. Amazon.com
increased 2 7/8 to 66 1/2. Toy seller eToys Inc. rose 9 3/8 to
53. Value America Inc., which sells computers and other products
online, rose 2 11/16 to 13 3/8.
Outages
In response to the system outages, including one in June
that lasted almost a full day, eBay has taken steps to boost its
computer systems and hire key technology staff. Last month, it
named Maynard Webb, former chief information officer at personal-
computer maker Gateway Inc., to oversee all engineering and
technical operations.
EBay also recently installed a backup-computer system that
kicks in within two to three hours. It is planning an even faster
set-up that would limit outages to 20 minutes.
Evidence those moves may be paying off came yesterday when
eBay for one day waived the fees it normally charges sellers to
list items for auction. As a result of ''Free Listing Day,'' eBay
saw a 50 percent jump in listings over a 24-hour period to more
than 4 million, said analyst Jamie Kiggen of Donaldson, Lufkin &
Jenrette.
''Management's confidence in its enhanced infrastructure was
rewarded as systems performed well despite this unprecedented
surge in listings,'' said Kiggen, who today reiterated his
''buy'' rating on the stock.
Biggest Auction
EBay's listings rose today to more than 4 million from 2.7
million yesterday after it waived the listing fees. Yahoo
Auctions, meantime, hosts about 500,000 auctions a day on
average, and Amazon Auctions hosts just over 100,000, according
to the Web site AuctionWatch.com, which provides research on
Internet auction services.
EBay probably will continue to have intermittent
technological snags as it continues to improve its systems,
analysts said. Problems with its servers on Monday made it
impossible for customers to list or bid on items for just over an
hour.
Still, eBay's lead over the competition is considerable, and
customers keep coming back, said Wachovia Securities analyst
Robert Fontana, who today rated eBay ''buy'' in new coverage.
''EBay has almost a shield around them because they have the
largest number of sellers and buyers,'' Fontana said. ''If the
blue-chip companies like Amazon and Yahoo can't make a
significant dent in eBay, who's going to be able to?''
===========NSM===============
Technology News
Sat, 11 Sep 1999, 1:53am EDT
National Semiconductor Shares Rise as 1st-Qtr Loss at Chipmaker Narrows
By Anthony Effinger
National Semiconductor Shares Rise After Loss Narrows (Update6)
(Updates with closing share price.)
Santa Clara, California, Sept. 10 (Bloomberg) -- National
Semiconductor Corp. shares rose 8.2 percent after the maker of
chips for computers and communications equipment said its fiscal
first-quarter loss narrowed and orders increased.
The shares rose 2 5/8 to 34 5/8, their highest since
December 1997. The stock has almost tripled since May, when Chief
Executive Brian Halla said he planned to sell the Cyrix
microprocessor unit. The $167 million sale, to Via Technologies
Inc., was completed last week.
Without Cyrix, National Semi is focusing on its profitable
business of making analog chips for mobile phones and video
equipment. The company bought Cyrix in 1997, pushing it into a
losing battle with No. 1 chipmaker Intel Corp.
''They've done what they had to do,'' said analyst Joe Osha
at Merrill Lynch & Co., who rates National Semi as
''accumulate.''
National Semi's loss from operations in the quarter ended
Aug. 29 was $1.3 million, or 1 cent a share, compared with a loss
of $104.8 million, or 63 cents, in the year-earlier period.
Fighting Intel
Halla's goal with Cyrix was to make processors for personal
computers costing as little as $300, a radical notion when he
made the acquisition. Intel responded to National Semi's threat
with Celeron, a bargain-priced chip aimed at low-cost PCs.
Celeron helped force National Semi out of the business and left
another Intel rival, Advanced Micro Devices Inc., with large
losses.
After six straight quarters of losses, National Semi expects
to return to profitability this quarter by selling more analog
chips, which help turn light, heat and sound into signals that
computers can understand. The company forecast that fiscal second-
quarter sales will rise 7 percent to 9 percent from the first
quarter.
The analog-chip market is booming because of the growing
popularity of mobile phones. National Semi makes chips that go
into the phones themselves and into chargers. Its products also
are in the base stations that control wireless calls.
National Semi's loss in the first quarter was much smaller
than expected. Wall Street analysts had forecast a loss of 14
cents, the average of estimates from First Call Corp. Some
unpublished estimates were for a loss of 12 cents.
Orders, a barometer of future sales, rose 12 percent during
the quarter. Excluding Cyrix, orders rose 38 percent. Orders for
National Semi's analog chips rose 57 percent in the quarter.
''Their basic business is good,'' said Jack Geraghty, a
technology analyst at Gerard Klauer Mattison & Co. in New York,
who rates National Semiconductor shares ''buy.''
Including a gain of $48.4 million from the sale of Fairchild
Semiconductor stock, Santa Clara, California-based National Semi
earned $47.1 million, or 25 cents a share, in the first quarter.
=============SNDK=============
SanDisk Shares Soar as Digital Cameras, Internet Players Drive Chip Demand
By John Stebbins
SanDisk Soars on Need to Store Digital Photos, Music (Update3)
(Updates with closing share price.)
Sunnyvale, California, Sept. 10 (Bloomberg) -- SanDisk Corp.
is no flash in the pan for investors who foresaw that demand for
digital cameras, Internet music players and mini-computers would
ignite a need for the company's memory chips.
SanDisk designs semiconductors and cards that use so-called
flash-memory technology, which acts like recording tape to let
devices store photos, music and information when the power is off
and record over the old data hundreds of thousands of times.
As equipment that uses flash memory takes off, so have
SanDisk sales, making it the No. 1 flash-data storage company
ahead of Toshiba Corp. SanDisk shares have soared as well,
rocketing more than 11-fold from a year ago. Analysts forecast
further gains from an expected increase in the flash-card market
to $2.8 billion in 2001 from $440 million last year.
''SanDisk is well-positioned to benefit from the explosive
demand trends in the emerging markets for digital cameras, MP3
audio players and smart phones,'' said Mark Edelstone, a Morgan
Stanley Dean Witter analyst, who rates Sunnyvale, California-
based SanDisk ''outperform.''
MP3 players are cigarette-pack size devices that store and
play music that's mainly retrieved from the Internet.
SanDisk had 22.7 percent of the flash-card market in 1998
ahead of Toshiba's 13.2 percent, said Alan Niebel, director of
nonvolatile memory research at Semico Research Corp., a Phoenix-
based market researcher.
''SanDisk will definitely gain market share in 1999 and
double its revenue from 1998,'' Niebel said.
The company had 1998 revenue of $135.8 million. Second-
quarter net income rose more than fivefold to $5.7 million, or 19
cents a share, from $1.05 million, or 4 cents, topping the 15-
cent average analyst estimate from First Call Corp.
SanDisk shares rose 3/8 to 88 7/8. A year ago, they traded
at 7 1/2.
Flash Memory
SanDisk was founded in 1988 by Eli Harari, an international
authority on flash-memory technology. Its first product was
developed with AT&T Corp.'s Bell Labs and marketed in 1991. The
company originally was called SunDisk until the name was changed
in 1995 -- the year the company went public -- to prevent
confusion with computer server maker Sun Microsystems Inc.
The company designs the flash-memory chips, which then are
manufactured by companies including Motorola Inc. and Matsushita
Electric Industrial Company Ltd. The chips are shipped back to
SanDisk's headquarters to be assembled in the memory cards.
Intel Corp., the world's largest chipmaker, Toshiba, Japan's
No. 2 chipmaker, Samsung Electronics and others pay royalties to
SanDisk to license its technology, said Brandon Talaich, SanDisk
spokesman. About a quarter of 1998 revenue came from licenses and
royalties.
SanDisk's gaining market share thanks to customers including
Eastman Kodak Co., the world's biggest photography company, and
No. 2 computer maker Hewlett-Packard Co. Both use SanDisk's
CompactFlash memory card in their digital cameras.
The memory cards are matchbook-size and hold as much as 96
megabytes of memory, or 100 to 800 photos, depending on the
quality. The cards cost $40 to $299 and are available at stores
and on the Internet, usually at a substantial discount.
Cell-Phone Users
Analysts have high hopes for SanDisk's MultiMediaCard, a
flash-memory product endorsed by Motorola, Nokia Oyj, the world's
No. 1 cell-phone maker, Ericsson AB and Qualcomm Inc., for their
new smart phones, wrote Dan Niles, a BancBoston Robertson
Stephens analyst, in a July report.
MultiMediaCard revenue tripled in the second quarter to 6
percent of total revenue from 2 percent in the first, Niles said.
Unit sales more than doubled during the same time, he wrote.
International Data Corp. forecasts the number of cell
phones, feature-enriched smart phones and pagers will rise about
73 percent to 394 million in 2003 from 228 million in 2000, said
SanDisk's Talaich.
''We expect our products to be in a good number of those,''
he said.
SanDisk also is tapping the market for downloading music
from the Internet into MP3 players. Sales in that market are
expected to increase more than fivefold to 17 million MP3 players
sold in 2003 from 8 million players sold in 2000, Talaich said.
SanDisk ''has one of the largest earnings-per-share upside
of any company we follow,'' Niles wrote.
Tough Products
Memory cards can withstand wide temperature ranges, are
impervious to shocks and are small, attributes that make them
more attractive than computer disk drives for small, portable
devices, analysts said. However, memory cards are more expensive
on a per-megabyte basis than even the most expensive disk drives.
SanDisk faces competition from Toshiba, which makes a
similar line of products called SmartMedia and from Sony Corp.'s
Memory Stick, used in its own products, Semico's Niebel said.
''SanDisk's edge is that they were one of the first ones
with this technology and their cards' (sizes) are setting the
standards for the industry,'' Niebel said.
Niles, who rates SanDisk ''buy,'' expects the company to
benefit from sales of larger capacity, more profitable memory
cards in coming months. He expects royalty revenue for the second
half, especially the fourth quarter, to ''have huge upside'' to
his $19 million estimate.
''The potential for additional positive earnings surprises
and the excitement surrounding the company's involvement in the
digital camera and MP3 audio markets should continue to drive the
stock higher'' for the rest of the year, said Morgan Stanley Dean
Witter's Edelstone. |
