Tech Stocks in Motion

Updated from 12:51 p.m. EDT

Shares of Interwave Communications (IWAV Quote) fell 41.1% Friday after the company's $56 million merger with Alvarion(ALVR Quote) fell through.

In July, Interwave agreed to be acquired by Alvarion for $5.75 a share in cash. In announcing its unwillingness to go forward with the deal, Alvarion said Friday that Interwave has "experienced a material adverse effect with respect to its business." Alvarion said it would be willing to discuss concluding a transaction on different terms. Interwave says that it "strongly and vehemently disagrees with Alvarion's position and intends to pursue all available alternatives." Shares of Interwave traded down $2.36 to $3.38, while shares of Alvarion traded up 55 cents to $13.49.

Redback Networks(RBAK Quote) fell 34.1% after the company warned that third-quarter sales would fall well below expectations. The maker of networking equipment expects sales of $20 million to $22 million, well below the forecast of $34 million from analysts polled by Thomson First Call. Redback said that order delays and softness in orders for its SMS products led to the weak sales outlook. Shares traded down $1.78 to $3.44. ...