By Dan Gallagher, MarketWatch
SAN FRANCISCO (MarketWatch) -- Tech stocks took a heavier
beating Monday afternoon as a market-wide selloff pushed the sector
deeper into the red, despite isolated gains at Sprint Nextel Corp.
and Netflix Inc.
Sprint remained up 14% on the strength of an unsolicited
takeover bid from Dish Network. Netflix was up 3% after one broker
set a $250 price target on the online movie firm.
By early afternoon, the Nasdaq Composite Index (RIXF) fell 1.9%
to 3,233 while the Philadelphia Semiconductor Index (SOX) fell 2.2%
and the Morgan Stanley High-Tech Index (MSH) fell 1.4%.
The Dow slid nearly 200 points by the afternoon, following data
from China that showed economic growth slowing. The selloff also
pushed gold prices to their worst one-day drop in years.
Among big tech names, Apple (AAPL) was down nearly 2%, while
Amazon.com (AMZN) fell 1.4%, Cisco Systems (CSCO) fell 1.4% and
Facebook (FB) shed more than 3%.
Sprint (US-S) was last up 14% to $7.09 -- keeping the stock
above the $7 mark for the first time since fall 2008. Dish Network
Corp. (DISH) announced an unsolicited $25.5 billion bid for Sprint
that involves about $4.76 per share in cash and about $2.24 per
share in Dish stock.
The proposed deal could derail a pending merger between Sprint
and Softbank Corp., the Japanese telecommunications giant that
offered to buy about 70% of Sprint in a $20 billion deal.
In a conference call on Monday morning, Dish chairman Charlie
Ergen touted the advantages his company could bring compared with
Softbank, including a large block of domestic spectrum.
"Obviously, we're talking about bringing some things that
SoftBank just can't bring to create a superior company," he said on
the call, adding that his offer also brings about $24 billion in
"new opportunity synergies" to the deal.
Sprint issued a brief statement saying it had received the Dish
offer and that its board of directors "will evaluate this proposal
carefully and consistent with its fiduciary and legal duties."
Dish shares fell more than 3% to $36.23. Rival carriers AT&T
(T) and Verizon (VZ) each fell by a fraction. Verizon has
reportedly offered to pay about $1.5 billion to acquire wireless
spectrum from Clearwire (CLWR) , according to The Wall Street
Journal. Clearwire shares were last trading down 1.7% to $3.21.
Smaller carriers MetroPCS (PCS) and Leap Wireless (LEAP) were
each down more than 2%.
Netflix (NFLX) got a boost after BTIG analyst Richard Greenfield
initiated his coverage of the stock with a buy rating and
$250-a-share price target. In a research note, Greenfield said,
"The improving Netflix price/value relationship, along with
high-quality, proprietary original programming will drive better
than expected subscriber growth and moderate [subscriber]
churn."
Google (GOOG) shares were down about 0.8% following reports that
the company had made a proposal to tweak its search results to ease
anticompetitive concerns raised by the European Union.
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