DJ Globespan Up -2: Weak DSL Market Overplayed - Analyst
By Ellen Sheng
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--In a move that perplexed analysts, shares of Globespan
Inc. (GSPN) surged as much as 30% Wednesday.
According to Jefferies & Co. analyst Joseph Bellace, the company has no news
and there is "no fundamental development responsible" for the rising stock
price.
Bellace noted that investors have been covering their short positions, which
could partly account for the rally.
UBS Warburg analyst Gregory Mischou added that there was a rebound in some
of the "better quality" stocks among makers of integrated circuits during
intraday trading. Shares of Broadcom Corp. (BRCM), PMC-Sierra Inc. (PMCS)
and Applied Micro Circuits Corp. (AMCC) peaked around midday.
"There has been a lot of pressure on the sector," he said, but investors are
starting to realize that these markets are still "pretty solid."
Mischou said that stock's surge could be a continuation of the market's
rebound Tuesday.
Concerns about the DSL market weakening have been overplayed, added SG Cowen
analyst Drew Peck, and Globespan's stock has been "battered
disproportionately."
Peck emphasized that even in a slowing DSL market, Globespan has been
picking up market share. The analyst also pointed out that the company's
technology, which is programmable and consumes less power than that of
competitors, is better.
Company officials didn't return calls.
Globespan, Red Bank, New Jersey, makes integrated circuits and software for
communications companies.
Globespan's stock recently traded hands at $44.25, up 16.7%, or $6.31, on
volume of 6.9 million shares. Average volume is 3.1 million shares.
-By Ellen Sheng, Dow Jones Newswires; 201-938-5176; ellen.sheng@dowjones.com
(END) DOW JONES NEWS 12-06-00
03:21 PM |
