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Newbridgestock riding high
Telecommunications: Share value rises
sharply on news of algorithm
Jill Vardy
Financial Post
OTTAWA - Newbridge Networks Corp.'s shares rose strongly
yesterday on news the company has invented a ground-breaking
feature for its telecommunications switches.
Newbridge revealed in yesterday's Financial Post it has developed
an algorithm that can differentiate between digital signals sent over
telecommunications networks.
The stock rose 2.20¢ to $33.20 in Toronto and it was up 1 1/2
(US) to 21 9Ú16 (US) in New York. Trading volume was heavy.
Software based on the algorithm, once it's embedded into
Newbridge switches next spring, would allow phone companies and
telecommunications service providers to easily determine what kind
of signal is being sent, and prioritize those signals according to type.
E-mail messages, for example, can wait a few minutes for
transmission; video-conferencing signals can't.
Analysts and engineers pored over technical details made available
by the company yesterday. Reaction ranged from skeptical to
enthusiastic.
"Yeah, it's real. They've been demonstrating it in simulations," said
Gurinder Parhar, technology analyst at HSBC Securities in Toronto.
He said it's too early, though, to revise Newbridge's growth
prospects based on the new product.
Brendan Caldwell, portfolio manager at Caldwell Securities Ltd.,
said it's no surprise that Newbridge cracked the problem of
accurately managing data signals.
"[Newbridge CEO] Terry Matthews has been talking network
management for a very long time...," Mr. Caldwell said. "Whatever
mistakes Newbridge has made, they've never been technical ones."
Internet-based chat groups were buzzing about the invention
yesterday.
Most of the demand for the stock was from individual investors.
Institutional shareholders seem to be adopting a wait-and-see
stance regarding the new algorithm.
Mr. Caldwell said one client phoned to place a large order based
on the news. He's recommending clients buy the stock and expects
it to hit at least $50 in the next 12 months.
Newbridge's innovation is not the only attempt to identify and
prioritize signals sent over public networks.
Cisco Systems Inc. and Lucent Technologies, among others, have
developed products they say do similar things. None of
Newbridge's competitors had official comments on the new
technology yesterday. |
