Reposted from the EMC thread
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To: JDN who wrote (10633)
From: John Carragher Monday, Jul 17, 2000 6:11 PM ET
Respond to Post # 10634 of 10641
ow Jones Newswires
Advanced Digital Up 19% On Rumor That EMC Will
Buy Co.
Dow Jones Newswires
By Donna Fuscaldo
NEW YORK -- Shares of Advanced Digital Information Corp. (ADIC) closed up 20.6% in
regular trading session Monday on a rumor that it will be bought by EMC Corp. (EMC), a large
data storage company.
Although investors snapped up shares of Advanced Digital on the rumor, analysts interviewed by
Dow Jones Newswires said the rumor is illogical.
The rumor "makes no sense," said Glenn Hanus, a research analyst at Needham & Co. He noted
that EMC's Chief Executive Michael Ruettgers has publicly stated that tape storage is a dying
phenomenon.
Advanced Digital provides software, automated tape storage libraries and storage area networking
for workstations and networks of personal computers.
A spokesman from EMC Corp. said the company "can't and won't" speculate on rumors.
Steve Whitner, marketing director at Advanced Digital, said he has not heard of any such rumor.
He directed all additional questions to the investors relations department, which has yet to return
calls.
Shares of the Redmond, Wash. company finished the trading session up 20.6%, or 2 11/16, at 15
3/4 on volume of 4 million compared with average daily volume of 1.7 million.
In the after-hours market, Advanced Digital shares continued to climb at 16 11/64, according to
Reuters Instinet.
The rumor isn't hurting Advanced Digital, said Bill Lewis, an analyst at Chase H&Q. "The stock
has been beaten up and people are looking for an excuse to get in," he said.
Lewis said that the rumor is probably false. Given the public comments EMC has made about the
death of tape storage, it doesn't make sense, he said.
"EMC is the world's largest independent storage company that could make an acquisition like that
without batting an eye," he said, explaining why investors would believe the rumor. The only thing
that would interest EMC would be Advanced Digital's emerging software product, he noted.
Lewis added that Advanced Digital is a volatile stock that has been off in recent weeks. In March
the stock hit a high of 50 1/2.
Emily Taggart, a spokeswoman for Advanced Digital, said the company never comments on
rumors. As for the stock's run-up Monday, Taggart said the only thing she's aware of is the EMC
rumor.
-Donna Fuscaldo, Dow Jones Newswires; |
