FYI, Briefing.com's discussion of the fall...
11:17 ET ******
Citrix Systems Inc. (CTXS) 42 13/16 -8 3/4: The shares of this developer of application server software products continue to get pounded this morning after falling by 8 1/8 or 13.61% yesterday on growing concerns that Wednesday's court decision to break-up Microsoft (MSFT +3/16) would only increase competition for the Microsoft Windows NTServer network operating system. Reports three years ago that Microsoft was interested in developing its own in-house server technology instead of working with Citrix put pressure on the shares, much as the latest water-cooler talk has done so far. While there is some reason to suspect that if Microsoft were broken-up in the way the government has mapped out Microsoft could become a competitor in this space, it's very premature to assume that this break-up will occur overnight and that Citrix will face immediate competition. In fact, most brokerage firms that follow the stock are not putting much weight on this conclusion as the fate of Microsoft is far from being determined. Accordingly, late yesterday, while the stock was being sold indiscriminately, A.G. Edwards's John Puricelli reiterated his "buy" rating and price target of $130, but had little impact on the selling. Today, the selling continues as Dain Rauscher Wessels downgrades the stock from a "strong buy" to "buy" on the view that channel checks suggest incremental discounting in the period, which increases the risk that Citrix could come up short in the June quarter. Certainly reports that the company's CFO John Cunningham pulled out of the PaineWebber Growth & Technology Conference in New York yesterday adds some credence to this view. However, so far Citrix has been silent about the latter issue, while investors continue to fret about the Microsoft break-up and its ultimate impact if and when MSFT invades this space, which is probably at least one, if not two years away. This is certainly looking well into the future and assuming the worst. - Raul Nicho, Briefing.com |
