Cirrus' Inventory Snafu

JUMPY, JUMPY, JUMPY. ON Nov. 7, chipmaker Cirrus Logic sent technology stocks reeling with its news that fourth-quarter sales growth would dip. Shares of Cirrus itself dropped 30%, to $28. Cirrus' problem: One bullish customer, probably Packard Bell, overestimated demand for its personal computers, then cut chip orders when sales failed to materialize. Rather than showing underlying weakness in PC demand, though, analysts suggest it says more about the difficulties of managing inventories amid red-hot growth.

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