The Night Watch: Big Yahoo!, Little Crossroads See Postclose Gains
(Updated from 7:20 p.m. EDT)
Pump up the volume. Pump up the volume. Trade! Trade!
It is Friday night, and it is on precisely these sleepy summer evenings, when volume is thinner than an undernourished runway model, that sly stock jobbers can blow stocks around with little breath.
Read-Rite (RDRT) pulled in the buyers today, ending the session 16% higher. Magnetism doesn't just describe the company's performance today, but also its business. The California tech company supplies magnetic recording heads for the hard-disk-drive market. Since it hit its 52-week-low of $1.84, on June 22, the company has been slowly recovering. Wednesday's third-quarter results helped speed the climb. The company announced a loss of $37.7 million, or 66 cents a share, on sales of $140.9 million, an improvement over the $44 million loss in the second quarter and the $50.5 million loss in the year-ago period. Also, shipments grew by 10%. Tonight profit-taking set in after two days of sharp gains, taking the stock 10 cents lower to 4.99.
Trader chat rooms are not always the nicest place to play. There is usually a lot more profanity than profundity and truth isn't always served up as ordered. Crossroads Systems (CRDS) was the subject of colorful discussion in one such chat room. The provider of storage routers for fiber-channel storage area networks rose almost 30% today despite being slapped with a class-action lawsuit on Wednesday. Typically these lawsuits don't roil share prices too harshly, but there was little news to explain the buying. Some chatters implied that eager bargain-hunting was responsible after a 52-week low of 4.25 hit on July 28. Another trader alleged stock manipulation. Whatever the reason, Crossroads was the most active issue on Island, trading 1.87, or 22%, higher to 10.12 on 320,000 shares.
On Wednesday traders dumped PhyCor (PHYC) shares, fearing that the company would be delisted from the Nasdaq after recording damages of $350 million to $450 million in the second and third quarters, due to the write-off of assets. Thursday, the Tennessee-based operator of medical clinics sold some of its assets to the Grove Hill Medical Center in an effort to restructure its relationships with the clinics it manages. PhyCor received about $15.5 million in proceeds, a price exceeding the net book value of the assets. Today the company settled up 42%, gained 10% in early postclose trading and then drifted lower to a flat 88 cents.
The shares of Emulex (EMLX) rallied 42% during the day session after the data network company reported better-than-expected results. The surprisingly strong performance boosted analysts' confidence in the company's business model. The day's flood of buying shrank to a trickle, as Emulex rose 1.31, or 2%, to 69.25.
CAIS Internet (CAIS) jumped 24% today on news that Microsoft (MSFT) poured $40 million into the broadband Internet access provider for businesses and hotels. The companies are developing a co-branded portal for the hospitality industry. CAIS will report second-quarter results Monday, with consensus expectations calling for a loss of $1.17 a share. Meanwhile, the after-hours party continued to rage as the Internet company gained an additional 37 cents, or 3.8%, to 10.37.
|10 most active stocks on Instinet (6:30 p.m. EDT)|
|U.S. Bancorp (USB)||21.3125||-0.0625||94,200|
|Innovative Solutions (ISSC)||12.1875||0||77,300|
|Crossroads Systems (CRDS)||10.125||+1.875||62,265|
|10 most active stocks on Island ECN (7:30 p.m. EDT)|
|Crossroads Systems (CRDS)||10.125||+1.875||323,650|
|PhyCor ( PHYC)||0.3125||0||23,285|
|Citrix Systems (CTXS)||15.29||+0.3525||15,625|
|Onyx Pharmaceuticals (ONXX)||16.375||+0.125||15,490|
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