[Dow Jones Release]
Rob,
I'm long ..and I do think that is Microsoft's plan. Sorry for being
so flip. I just get "jazzed" with biased coverage sometimes.
For example...DJ release this afternoon. Content is not so bad..but
the headline seems a little "premature".
Rumors Of Big Deals For ADSL-Technology Firms Fail To Materialize
NEW YORK -(Dow Jones)- Shares of Westell Technologies Inc. and Amati Communications Corp., which are both developing technology to increase the data-carrying capacity of traditional copper telephone wires, moved lower in recent days after rumors of a key pact from a big telephone company to use such technology failed to materialize.
Amati shares were off $1.375, or 10%, at $11.875 in Wednesday afternoon trading after falling 8.6% Tuesday. Stock of Westell was off 37.5 cents at $17.75 in Wednesday afternoon trading after falling 4.6% Tuesday.
GTE Corp., Bell Atlantic Corp. and other phone companies for several months have been testing products developed by Amati and Westell. Last week, shares of the two surged on speculation that GTE Corp. would announce plans to take the asymetric digital subscriber line, or ADSL, technology beyond the test stage. Rumors had Westell close to a deal with Bell Atlantic Corp. or GTE.
Although Amati Tuesday announced that GTE is expanding the trials, the announcement wasn't as big as speculated, said James Kedersha, analyst at Cowen & Co. Amati and Westell shares have been buffeted by rumor and hype as speculation about upcoming commitments by major phone companies has come and gone, analysts said.
"Their products and technologies are going to find a role in the world," Kedersha said. "There are going to be announcements and there is going to be visibility where there was none. It's just a shame that people want to play this announcement game." At least one of the major phone companies is likely to work commercially with one or both of the companies - and soon, Kedersha said. Until then, the stocks of ADSL firms are highly susceptible to wild swings because of speculation.
Amati recently announced it will work with German giant Siemens AG to connect asynchronous transfer mode technology to ADSL transmission lines.
Most of the buzz surrounding ADSL has been in regard to the technology's promised ability to speed up the delivery of Internet information by increasing the data-carrying capacity of traditional telephone wires.
Some of the Baby Bell telephone companies plan to start rolling out ADSL-based modem services later this year as a direct challenge to cable television companies that aim to offer high-speed Internet access based on cable lines. ADSL promises to let customers download Internet pages as much as 50 times faster than normal modems.
Shares of Amati and other ADSL firms lost ground in recent months partly on fears that telecom-equipment heavyweights could steal the the lead in the nascent market by selling products substantially below cost. Motorola Inc. and Northern Telecom Ltd. have said they will compete for ADSL business. Westell last year lost out on a key ADSL contract to French conglomerate Alcatel Alsthom SA.
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Transmitted: 5/7/97 2:39 PM (L100Uy49)>> |
