READ THIS before selling AMTX
Dow Jones News Service -- June 12, 1996
Westell Tech Up 10% On Interest In DSL Technology
By Angela G. King
NEW YORK (Dow Jones)--Westell Technologies Inc. (WSTL) shares shot up
10% amid investors' excitement over technology that will allow phone
companies to provide multimedia services over their existing copper
lines, a company official and market observer said.
Garrick Case, spokesman for Westell, said the Oswego, Ill., maker of
analog, digital and fiber-optic communications equipment hasn't released
any news that would fuel the increase.
''What you have here is a new communications dimension, and that's DSL
technology,'' he said.
DSL, or digital subscriber line, technology ''will allow people around
the world to link up immediately to information, entertainment and each
other,'' Case said. ''It's something that is going to accelerate the
realization of a global village concept that futurists of the past
envisioned. You'll see a lot of exciting things happen in the entire
industry over the next six months.''
Kieran Taylor, a consultant with TeleChoice Inc., Verona, N.J., said
Westell is the leading manufacturer of DSL modems. The company has the
lowest price point in the industry and an 80% share of this nascent, $28
million market.
''There's no questions that consumers are ready for broadband Internet
access,'' he said. ''The question is what the cable companies or
telephone companies are going to do to provide that access.''
Speculation that DSL will emerge a winner sent Westell's shares up 4 1/2
to a post-split high of 49 1/2 on Nasdaq volume of 566,600, compared
with average daily volume of 143,500. The increase marks a second day on
the upswing since the company's 2-for-1 stock split Monday. Yesterday,
the company's shares closed at 45, up 16.1%.
There are an estimated 600 million copper phone lines around the world,
Case said. If 1% of those 600 million lines were equipped with DSL, it
would mean $3 billion in equipment revenue for DSL manufacturers, he
said.
Case said DSL companies, or those that are even rumored to be involved
in this sector, are doing very well on Wall Street. For example, 3.7
million shares of Verilink Corp. (VRLK), a San Jose, Calif., maker of
integrated access products for telecommunications, were priced at $16
yesterday and closed at 23 in their first day of trading. Today, the
shares were recently at 26 1/4.
I think it is very safe to say AMTX at 30 is TOO CHEAP. SEE you around $100 |
