Maybe not! The following news article gives a reasonable explanation for the price drop. Could be a good buying opportunity coming up:
> NEW YORK -(Dow Jones)- Concerns heightened by a VLSI Technology Inc.
first-quarter earnings preannouncement Thursday were behind Tuesday's 6% drop in Dallas Semiconductor Corp.'s share price, analysts said.
After a 4.5% decline Monday, Dallas Semiconductor's (DS) NYSE-listed stock fell $2.75, or 6.1%, to $42.625 on volume of 864,000 shares, compared with a daily average of 200,100.
Other analog chip stocks also have fallen over the past couple of
days, outperforming the broader semiconductor market on the down side.
According to Piper Jaffray Inc. analyst Ashok Kumar, the VLSI
preannouncement has put pressure on Dallas Semiconductor and other
companies that deal with cell-phone makers, which have been cutting back their inventory.
Also, the valuations for companies like Dallas Semiconductor are
high, Kumar said. In a downturn, they tend to experience a multiple
contraction, another industry source said.
PC prices have dropped about 40% in the past year, Kumar said, and
all the component makers have been feeling pressure.
Pressure from Compaq Computer Corp. (CPQ) could also be a factor
behind Dallas Semiconductor's downward movement, analysts said. The PC
maker led computer stocks down Tuesday morning after its finance chief,
speaking at a Merrill Lynch & Co. technology conference, described a
tough PC pricing environment.
"A lot of tech stocks are down today" after those comments, said
First Dallas Securities analyst David Mossberg. "The whole high-tech
sector is kind of being beaten up." Since Dallas Semiconductor is a
smaller company, Mossberg said, there's more of an impact on the share
price. "There's nothing wrong with the underlying fundamentals of the
company," he added.
A Dallas Semiconductor spokeswoman said the company hasn't made any
news announcement and typically doesn't comment on stock-price
movements.
Dallas Semiconductor develops, manufactures and markets complementary
metal oxide semiconductor integrated circuits and semiconductor-based
systems.<
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