Echelon Up 24%, Continuing Last Wk's Surge On Deal >ELON
Dow Jones News Service ~ May 15, 2000 ~ 2:15 pm EST
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02:15 PM DJ Echelon Up -2: Co's 'Biggest Deal' Propels Shrs >ELON By Anne Brady
PHOENIX (Dow Jones)--Shares of Echelon Corp. (ELON) were up more than 23% late Monday, continuing to benefit from last week's announcement of a deal with Italian electric-utility company Enel SpA (EN), an analyst said.
Shares of Echelon were up 10 11/16, to 56 1/4. About 4.6 million shares changed hands, about four times the average daily volume of 1.33 million.
On Wednesday, the Palo Alto, Calif., developer of device networks said it had signed a preliminary agreement with Enel, under which Enel will integrate Echelon's LonWorks networks into its digital meter projects.
"That is our biggest deal ever," Echelon spokeswoman Lyn Balisteri said.
Analyst Ara Mizrakjian of Robertson Stephens in New York said the Italian deal is probably the main factor continuing to propel the stock, which was up about 30% the day of the announcement and another 10.5% on Friday.
"The Italian deal is actually a pretty big deal," Mizrakjian said. "There doesn't need to be anything else (to drive the stock up)."
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03:30 PM =DJ Echelon Up -3: Stock Hammered In March Selloff >ELON
Robertson Stephens analyst Mizrakjian noted that Echelon's stock price has been on a wild ride during the last 52 weeks, trading as low as 6 on Aug. 5 and as high as 113 on March 14.
The stock seems to often move on company announcements, Echelon spokeswoman Balistreri observed.
When Echelon announced last February that its largest user group, an organization of 140 companies in Germany, was recommending that its members also use the company's software, the stock shot up 52.2% in one day.
Balistreri said the stock then got caught in the selloff that hit other technology companies and the market in general in March. Mizrakjian said the company was hit harder than some because of poor earnings and problems in the semiconductor industry.
However, demand is growing in Europe among utility companies that want to provide so-called "sticky" services that create loyal customers, he said, which should help Echelon succeed into the future.
-Anne Brady; Dow Jones Newswires; 602-258-2003
(END) DOW JONES NEWS 05-15-00
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