Openwave System Shares Gain On Analyst Upgrade

CHIP CUTTER

NEW YORK (AP) — Shares of software company Openwave Systems Inc. climbed nearly 6 percent in Tuesday afternoon trading after a Wedbush Morgan Securities analyst upgraded the stock to "Buy" from "Hold."

Wedbush Morgan analyst Scott Sutherland hiked his rating, noting stabilization among management staff and strong prospects for the company's mobile technology software.

Openwave primarily works with telecommunications firms such as AT&T and Sprint Nextel Corp. to help the carriers manage data on their mobile networks. As smart phones, netbooks and other mobile devices gain in popularity, Sutherland said Openwave stands to benefit.

"Openwave once again has the right product for market needs," he wrote in the note.

The company has struggled in recent years with a flurry of management changes and low employee morale, Sutherland said.

In May 2008, Openwave delayed filing a third-quarter report to the Securities and Exchange Commission after an employee alleged that some senior management members tried to "manage financial results."

The company later reported in a quarterly filing that an audit committee found no conclusive evidence of such behavior.

Sutherland said the mood of the company appears to be picking up, based on his talks with employees and industry officials.

"It definitely sounds like things are turning around there," he said in an interview.

Openwave shares rose 11 cents, or 5.8 percent, to $2 in afternoon trading.