To All. Apparently, this is the reason for the drop today. What do you make of this, Pat?
Newbridge shares fall after contract loss
TORONTO, March 19 (Reuters) - Newbridge Networks Corp [NYSE:NN - news] shares tumbled after the company failed
to win a contract with Deutsche Telekom AG (NYSE:DT - news; DTEG.F), the world's third-largest telecommunications carrier.
The stock fell to a low of C$37.80 from yesterday's close of C$40.85 before partly recovering to trade C$1.20 lower at C$39.65 in turnover of 552,604 shares. On New York, the stock fell to US$27 before recovering to 11/16 lower at 28-1/16.
''This is bad for Newbridge. Given their close relationship with Siemens, Deutsche Telecom was probably assumed to be in
Newbridge and Siemens' back pocket,'' said Duncan Stewart, portfolio manager at Tera Capital.
Deutsche made the asynchronous transfer mode equipment resale and distribution deal instead with FORE Systems Inc (FORE
- news), which comes as a heavy blow to Newbridge's concentrated efforts to boost ATM development.
Now analysts are again raising red flags about the future of Newbridge stock.
''Those who want to live for volatility for all means partake in buying this stock,'' said Richard Woo, an analyst with Thomson
Kernaghan & Co. ''But it's not for those who want to sleep a little better at night.''
The announcement follows three consecutive disappointing quarter results, and three months before fourth quarter results are in.
''If you're a husband and he cheats on you three straight times, how would you feel?'' said Woo. ''Some people are investing
their life savings in this. I would like to see some very strong financial results before I am positive about this stock.''
With Lucent Technologies Inc (LU - news), Northern Telecom Ltd (NYSE:NT - news; NTL.TO - news) and Cisco Systems
Inc (CSCO - news) all bidding on the same accounts, Woo said that ''anything could happen.''
''It's very competitive out there and the pie is only so big,'' said Woo, adding that an excess of employees was detrimental to
revenue figures. |
