Tim Luke: I-Thomson commentary:
partners.thomsoninvest.net
I-Watch Market Commentary
ÿÿÿÿÿÿÿÿÿÿÿÿ Morning Update | Intraday | Market Wrapÿ
ÿ NN -- Netwrk & Comm Dvcs -- Technology
ÿ 19-Nov-99 11:25:19 While word from management regarding the
ÿ potential sale of the company failed to counter the negative
ÿ reaction to Newbridge Network's weak 3Q results, it certainly
ÿ grabbed the attention of the institutional community. After the
ÿ close on Thursday, Newbridge reported a 3Q net of $0.08 per share,
ÿ a penny shy of the First Call consensus estimate. The firm also
ÿ announced a new restructuring plan that includes a 10% workforce
ÿ reduction and said it is reviewing all strategic options, including the
ÿ possible sale of the company. Newbridge has fallen $2 7/8, or 12%,
ÿ to $21 1/8 while trading volume has already surged to 2.4 million
ÿ shares which puts it on pace to easily eclipse its average daily
ÿ volume of 3.6 million shares. Block trading is at heightened levels,
ÿ accounting for about 40% of total volume. So who's buying and
ÿ who's selling? Well, the stock had a nice run-up going into its
ÿ earnings announcement, posting a 22% gain in November through
ÿ yesterday's close. So it's not surprising to see some profit taking
ÿ from investors who would like to cash in now rather than wait it out
ÿ as the firm looks for a potential buyer to come along - particularly,
ÿ given the fact that no one knows if a buyer will actually come along
ÿ or not. On the buying side, the activity most likely stems from
ÿ investors with a stronger risk-tolerance who are buying on hopes of
ÿ a favorable bid from another firm. These are the investors behind
ÿ the pre-trade bids on I-Watch who are taking a pro-active approach
ÿ to buying stock. While the demand has yet to rise above the supply
ÿ from the disappointed shareholders, a near-term balance between
ÿ the two sides has been found in the $21 ¬ range. |
