Optibase loses 16% as Nasdaq sheds 1.9% - TheStreet

Technology shares on Wall Street are posting losses. The Nasdaq Composite index losing 1.9% as

Goldman Sachs

's Internet index falls 5%. The Dow Jones has been mildly swinging as of opening and as of writing is edging up 0.1%.

The Holiday Season is usually marked by dull sessions, which results in strong fluctuations, and this means that the current trend may well change. At any rate, as trade opened, the two leading indices posted gains.

While traders are apparently in no hurry to enter into new positions ahead of the New Year Holiday, there are those who opine that we can expect to find among today's investors those who are looking for Buy opportunities. Meanwhile, the window dressing effort continues as portfolio managers buy those shares that posted the best yields during the year.

Despite this effort, it is unlikely that traders will quickly forget 2000, probably the worst year in Nasdaq's record. The year got off to a good start as the Nasdaq scored a peak of 5,048 points in March, but it is now down 50% to 2,530 points. This plunge comes to a negative yield of 38 as of the beginning of the year.

Israeli shares are mixed. Attention centers on

Optibase

(Nasdaq:OBAS), which is losing 16% to $6.3 after yesterday releasing a profit warning for the fourth quarter of 2000. The current price of stock reflects a company value of $68 million, 15% short of the cash company had in its coffers as of the end of the third quarter of 2000.

Optibase, which develops video and audio products for broadband networks, announced it expects to post sales totaling $6.8 million to $7.3 million in the fourth quarter of 2000, against sales totaling $8.3 million in the previous quarter and, granted revenues fall within the lower range, 26% short

Robertson Stephens

's forecast.

Optibase expects that its net profit will break-even in the fourth quarter of 2000, excluding one-time expenses, against the forecast EPS of 15 cents, and EPS of 19 cents in the third quarter of 2000.

The outlook for 2001 is not any better. The company has admitted that it is unable to grow via its existing line of products and that it will have to concentrate on development and expansion of its new MediaGateway product, MGW2000. The research and development expenses of the MediaGateway product line are expected to significantly squeeze 2001 EPS to a range of 5 cents to 25 cents, against the forecast 70 cents, and against EPS of 50 cents in 2000. The company expects that the new products will accelerate growth by 50% to 70% in 2001.

RADCOM

(Nasdaq:RDCM), which develops tools for quality control of voice and data communications networks, is off 4.6% to $2.6 after losing 90% of its peak. Yesterday the company announced it will end the fourth quarter of 2000 with revenues of $7.6 million to $8.2 million, against $8.1 million in the same period last year, and sales totaling $9 million in the third quarter of 2000. The company expects to post a loss of 4 cents to 7 cents per share in the fourth quarter of 2000, after posting EPS of 5 cents in the previous quarter. The company will be required in the fourth quarter to meet one-time expenses in respect of the reorganization of its product line, which will lead to a bigger loss of 16 cents to 20 cents per share. It should be noted that today the company is not covered by any leading investment house.

Nice Systems

(Nasdaq:NICE) is adding 10.7% to $19.4 after plummeting 61% yesterday following its announcement that because of the slump in the IT sector in the United States it will fall short of forecasts for the fourth quarter of 2000 as well as for 2001, and that it expects a net loss in the fourth quarter of 2000.

Following the profit warning,

Salomon Smith Barney

downgraded Nice from Buy to Neutral, and cut the price target from $90 to $25.

Lehman Brothers

(NYSE:LEH) slashed the target from $75 to $40, and cut 2001 EPS from $2.5 to $1.6.

Several small Israeli companies are rallying today after all but crashing in the second half of the year. But this is hardly enough to comfort investors who have lost over 90% of their holdings. Local Internet provider

Internet Gold-Golden Lines

(Nasdaq:IGLD) is jumping 31% to $1.8. Tioga Technologies (Nasdaq:TIGA) is adding 20% to $1.9. But

Gilat Satellite Networks

(Nasdaq:GILTF) is losing 10% to a new record low $26.8, on fears that that the company is to release a profit warning for the fourth quarter of 2000. The stock, which has already lost 85% of its peak, is once again being disfavored by both investors and analysts. The latter claim that the stock's risk level has considerably increased especially because of the uncertainty surrounding the success of the satellite Internet venture

Starband

(formerly known as Gilat2Home). The venture, in which

Microsoft

(Nasdaq:MSFT) and

EchoStar Communications Corporation

(Nasdaq:DISH) are among the partners, has been operating in the United States as of two months, but in the meantime has been generating mostly losses, apparently because selling satellite channels to the venture involves no margin of profit.