Jul 11, 2012 3:31 AM ET–Mellanox Technologues Ltd fell in New York to trade at the biggest discount to its Tel Aviv shares on record on concern the Israeli technology company will report slower growth after Advanced Micro Devices Inc. (AMD)’s sales dropped.
Mellanox, the maker of technology used to transfer and store data quickly, slumped 6 percent in New York, boosting the discount to the Tel Aviv stock to $5.58. The Bloomberg Israel-US Equity Index (ISRA25BN) of the most traded Israeli companies in New York tumbled 2 percent to 78.64, the lowest since Nov. 25. SodaStream International Ltd. slid the most in two months after Chief Executive Officer Daniel Birnbaum sold shares.
AMD, the second-biggest maker of processors for personal computers, said second-quarter sales fell as slower growth in China and a worsening economic climate in Europe reduced demand for the chipmaker’s products. Asia accounted for 31 percent of Mellanox’s revenue in 2011, while Europe represented 15 percent, according to data compiled by Bloomberg. The Standard & Poor’s 500 Index fell for a fourth day on concern technology companies’ corporate profits will drop.
“Investors are making a connection between Mellanox and Advanced Micro Devices, and concluding it means Mellanox’s sales will also be weak,” Brian Freed, vice president of equity research at Wunderlich Securities Inc., said by phone yesterday from Memphis. “In a market driven by fear, a connection like that will cause people to make a call to sell the stock.”
Israel’s TA-25 Index (TA-25) declined 0.5 percent to 1,073.62 at 10:24 a.m. in Tel Aviv, and has fallen 1.1 percent in 2012, compared with a decline of 3.2 percent for the Israel-US Equity Index…Read More>>