Is That Ge In The Rearview Mirror?

Not many have heard of Research Frontiers (REFR), but its shares spiked up from 8 1/4 to 13 5/8 in one day, on Aug. 2. The reason: It announced an agreement licensing GE to make films incorporating the company's proprietary technology in electrically operated light-control devices. Some corporate insiders were quick to sell after the leap. But some pros have stayed on.

Why? They sniff a takeover. "There were big-block buyers of the stock, and I suspect one of them was GE," says Ignatius Teichberg, editor of Teichberg's Market Strategy, a newsletter that specializes in scouting takeover targets. A recent hot takeover pick was Bank South which he first recommended at 13. On Sept. 5, NationsBank agreed to acquire Bank South for 27.

He thinks GE is accumulating Research shares. "I don't think GE will stay a passive partner," says Teichberg, who first recommended the stock when it was at 4 7/8. He says: "Ultimately, GE will buy the company, which is worth 25 in a buyout." Research President Bob Saxe says he's unaware of any buying by GE. And a GE spokesman says GE doesn't own any of the shares.

Research Frontiers has yet to make 1 cents, Teichberg notes, but GE isn't the only believer in its "suspended-particle-device" technology, which incorporates a light-sensitive film between two pieces of glass. It's used in flat-panel displays for computers and TVs, eyewear, self-dimming auto sunroofs, sun visors, and rear-view mirrors."

Among other licensees: Sanyo Electric of Japan, Glaverbel of Belgium, and Japan Steel Works. Saxe expects one of the licensees to market a product next year using the technology.

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