Mellanox Drops as Intel Competition Seen Near: Tel Aviv Mover
Shares (MLNX) of Yokneam Elit, Israel-based Mellanox dropped 2.6 percent to 180.9 shekels, or $50.66, at 2:05 p.m. in Tel Aviv. The company’s U.S. traded shares yesterday plunged the most since June 20 to $50.80. The stock in Tel Aviv has declined 20 percent this year compared with a 3.8 percent gain in the benchmark TA-25 Index. The gauge advanced 0.1 percent today.
Intel yesterday set out a road map for data center products scheduled to begin in 2014, the world’s largest semiconductor maker said in a Business Wire statement. Intel’s announcement is a “significant step” toward developing a 100 gigabit competing product to Mellanox’s InfiniBand product, Eran Jacoby said today by phone. InfiniBand is used to transfer and store data in high-end computing and data centers.
“We anticipate Intel will use this technology in a powerful way,” Jacoby said in a e-mailed note. “This will lead to competition for Mellanox in the near future.” Mellanox
Chief Financial Officer Jacob Shulman said in March Intel was expected to introduce its products in “late 2014, maybe 2015.”
The stock has dropped 62 percent from its high in September on concern sales will slow as Intel introduces a similar technology. Intel acquired QLogic Corp. (QLGC)’s InfiniBand business last year to help it compete with Mellanox’s comparable products. Mellanox said in April second quarter revenue would be below estimates.
The company is expected to report on July 24 sales of $95.6 million for the second quarter of the year, according to an average of 15 analysts compiled by Bloomberg.
Trading in Tel Aviv was 5.5 percent of the shares three-month daily average volume. The company said on May 30 that it will be delisted from the Tel-Aviv Stock Exchange on Sept. 1. The shares were replaced on bourse benchmarks on June 16.
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