Genesis shares drop on worries over merger, prices
Wednesday July 30, 11:11 am ET
NEW YORK, July 30 (Reuters) - Genesis Microchip Inc. (NasdaqNM:GNSS - News) shares fell more than 20 percent
on Wednesday as analysts questioned whether its planned merger with rival Pixelworks would go through and forecast
further declines in prices of flat panel monitors.
Genesis, which makes microchips that are used in
flat panel displays, on Tuesday reported quarterly
earnings of $1.4 million, or 4 cents per share,
meeting analysts' expectations, but it gave
guidance for the current quarter that did not
measure up.
The company blamed its lower guidance in part
on pricing of flat panel displays, which it said
would fall about 25 percent during the current
fiscal second quarter.
It also said it was discussing with Pixelworks Inc.
(NasdaqNM:PXLW - News) whether it makes
sense to complete their merger and combine the
two makers of chips used in both televisions and
monitors.
Pacific Growth Equities cut its rating on Genesis
shares to "equal weight" from "overweight."
Analyst Brian Alger said in a note that it appears a recent court settlement regarding Silicon Image Inc.
(NasdaqNM:SIMG - News) and Genesis does not affect the Pixelworks merger.
But he said Genesis has indicated there are discussions under way with Pixelworks in light of a number of events.
Genesis shares were off 20 percent, or $2.79, at $10.95, and Pixelworks was up 6 percent, or 40 cents, at $6.90 in
morning Nasdaq trading. The Philadelphia Stock Exchange Semiconductor index (Philadelphia:^SOXX - News) was
fractionally lower. |
