Mellanox Slides Most Since August After Intel Buys QLogic Assets
Mellanox Technologies Ltd. (MLNX), an Israeli adapter maker, dropped the most in five months in U.S. trading after Intel Corp. (INTC), the world’s largest semiconductor maker, said it will buy the assets of competitor QLogic Corp. (QLGC)
Mellanox sank 11 percent to $30.06 by 11:01 a.m. in New York, the most since Aug. 8 based on closing prices. The company’s Tel Aviv shares retreated 3.4 percent to 123.40 shekels, or the equivalent of $32.70. The $2.64 discount was the biggest among Israeli companies traded both in New York and Tel Aviv today.
Yokneam Elit, Israel-based Mellanox competes with QLogic in the market for technology known as InfiniBand, a communications link used in data centers, according to Kevin Cassidy, an analyst at Steifel Nicolaus & Co. in New York. Aliso Viejo, California-based QLogic said today it will sell its InfiniBand assets to Intel for $125 million in cash.
“The agreement changes the competitive dynamic of what is now a duopoly between QLogic and Mellanox,” Brian Freed, an analyst at Wunderlich Securities Inc., said by phone from Denver. “In the longer term Intel will become a tough competitor,” for Mellanox, he said.
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