Below is an article From Briefing.com on ATON and "friends", including FFIVer.
The article concludes with "That's the good news for Alteon and friends, and goes a long way towards explaining why these companies have seen such a strong stock price performance of late." How come I don't feel like FFIV has seen such a strong stock price performance of late? Sure, we are well off of the lows of 29, but we are also well off of the 86 per share that I paid. If only I had doubled down (or had some stops in place - I guess this lesson is worth the 40 per share that I'm under water.).
Enjoy.
[EDIT: This chart shows FFIV, EXTR, and ATON moving similarly through June and then uncoupling. While FFIV has languished, EXTR and ATON have moved nicely.
siliconinvestor.com
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11:47 ET ******
Alteon WebSystems (ATON) 145 1/16 +10 3/4: On July 10, Alteon preannounced June quarter results, stating that the company would achieve 80% sequential revenue growth and "operating profitability." With estimates then at a loss of a penny, the best guess was that profitability implied a few cents. Instead, ATON reported a solid $0.17 profit and the stock is responding accordingly today. Alteon is in the intelligent networking space (also known as content-aware, or Layer 4-7 switches). Alteon's Layer 4-7 comparables are f5 (FFIV) and Radware (RDWR), and it also can see competition from companies that specialize in Layer 3 but are moving into 4-7 switching, Foundry (FDRY) and Extreme (EXTR). And of course, all of these companies are dwarved by Cisco (CSCO). But as we note in today's Stock Brief, Cisco's dominance is not stopping these upstarts from posting tremendous revenue growth and taking a significant slice of both the Layer 3 and 4-7 markets. We argue in the Brief that the hypercompetitive telecom services market is forcing service providers to opt for the best and most cost-efficient equipment rather than just settling for the Cisco brand name. And most importantly, the enterprise market is starting to see a similar shift, with businesses now viewing networking gear as mission critical. Alteon does face increasing competition -- Cisco recently acquired competitor ArrowPoint, and Extreme is getting more active in the intelligent networking space. But demand is so strong in this industry that increasing competition probably won't have any immediate impact, and the best news is that Cisco's brand dominance will probably diminish in importance relative to product quality. That still leaves Alteon with the not insignificant challenge of producing the best product, but as with Extreme, f5, and Foundry, matching or exceeding Cisco's technology is a heckuva lot easier than matching its marketing machine. That's the good news for Alteon and friends, and goes a long way towards explaining why these companies have seen such a strong stock price performance of late. - Greg Jones, Briefing.com |
