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COMPANY NEWS
Globix Shares Rise On RealNetworks Online Video Pact
Dow Jones Online News, Tuesday, April 06, 1999 at 14:16
NEW YORK -(Dow Jones)- Internet-services provider Globix Corp.'s
shares climbed Tuesday after the company announced an
arrangement that will make it one of the largest providers
of RealNetworks Inc.'s online video and audio streaming
technology on the East Coast.
Globix's (GBIX) shares were up $13.375, or 38%, at $49.25 in
afternoon trading on Nasdaq volume of 2.2 million shares. Average daily volume is 369,600 shares. The stock surpassed its 52-week high of $45.50 set on March 22.
"Globix is a small Internet provider and striking a strategic
relationship with RealNetworks speaks to the quality of Globix's network and product offerings," said Lehman Brothers Inc. analyst Geoffrey Stricker.
Globix said it uses RealNetworks' (RNWK) streaming media offerings RealSystem G2 and Real-Time Streaming Protocol to provide real-time multimedia over the Internet. The company said the cross-platform client-server system is the first for streaming media on the Internet.
Adding to gains in the New York-based company's shares is investor anticipation over
three soon-to-be-opened Globix facilities that will offer on-demand bandwidth to
Internet companies, Southeast Research Partners Inc. analyst Anthony Stoss said.
The facilities, which will be based in London, San Francisco and New York, will boost
the company's capacity thirtyfold when they open at the end of the second quarter,
Lehman's Stricker said.
Stricker noted that the company has been capacity constrained and the new facilities will
help it to meet increased demand for collocation, Web hosting and Internet services.
Both analysts said the company's shares are undervalued compared with industry peers.
Stoss said Globix's stock, which trades at about 14 times 1999 earnings, is cheap compared with the levels at which competitors AboveNet Communications Inc.'s (ABOV) and Exodus Communications Inc.'s (EXDS) shares trade. |
