InvenSense slipped 4.8 percent to $17.05 at the close in New York. The shares earlier fell as much as 10.2 percent, the most since last week. They have gained 71 percent this year.
SanDisk, the biggest maker of flash memory cards, said yesterday that it faced weaker than expected pricing and demand for components that store data in mobile phones. InvenSense, which started publicly trading in November, makes products for a similar set of customers, said Auguste Richard, an analyst with Piper Jaffray in Sacramento, California.
“They’re in the same neighborhood, and people think it must be bad,” said Richard, who has an overweight rating on the stock, meaning investors should buy the shares.
InvenSense’s top competitor in making motion-sensing devices is Geneva-based STMicroelectronics NV. (STM) That company makes a wider range of products and is able to produce them more cheaply, said Srinivasan Sundararajan, an analyst with Oppenheimer & Co Inc. in New York.
InvenSense’s largest customers include Nintendo Co., HTC Corp. (2498) and Samsung Electronics Co. HTC and Samsung are competing with Apple Inc. for market share and investors are still waiting for Nintendo’s next-generation platform, he said.
“The customers have got problems of their own,” said Sundararajan, who downgraded InvenSense to perform, the equivalent of hold, from outperform last week.
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