53.7 F
San Diego
Thursday, Mar 28, 2024
-Advertisement-

Investors Apparently Like Leap Wireless’ No-Contract Business Model

Perhaps it’s the surge in the telecommunications industry, or a rebounding financial performance. Whatever the reason, shares of Leap Wireless International are jumping into record territory.

As of July 23, shares of Leap traded at $98.33, a record high, surpassing the previous high of $97.04 set July 20. In the past 52 weeks, shares of Leap have more than doubled in value. For the current year, the stock, traded under the ticker LEAP on Nasdaq, has gained more than 60 percent.

Andy Seybold, a telecom analyst in Santa Barbara, says LEAP’s escalating stock price probably owes a little bit to both the overall market’s rally, and positive news that the company is making.

He noted that the acquisition of additional wireless spectrum for the service called Cricket and the reception of its flat-rate business model have helped propel the stock.

“The market likes the business model, which is non-contract,” he said. “And studies have showed that about 85 percent of (cell phone) customers don’t leave their city, which plays perfectly to their model.”

Of the 17 analysts who cover LEAP, nine rated it either “outperform” or “strong buy.” Five have the stock at “buy,” and only three are rating it either “hold” or “neutral.”

The company hasn’t released or generated significant news in recent weeks, and the last time it revealed financial data came in an analysts’ conference June 13, said Jeanie Herbert, director of investor relations.

Seybold noted the rising market is lifting lots of boats, but the street also looks closely at the numbers, and where Leap Wireless is relative to other wireless carriers.

Another flat-rate cell company, MetroPCS, went public in April at $25 and closed July 23 at $39.01.

Seybold said at some point, investors may take their profits and sell their shares, probably when LEAP passes the century mark.

“I think a lot of investors will bail out at that point (past $100).”

All this stock appreciation should get interesting as we get closer to when Leap reveals its second-quarter numbers in early August. San Diego-based Leap has yet to set a date.

– – –


E.Digital Keeps Losing Streak Intact:

San Diego’s e.Digital Corp. released its year-end financials this month and, as expected, the business had another losing year, keeping a streak intact.

Since its founding in 1988, e.Digital has never made a profit. Through the end of March, the company racked up an accumulated deficit of $80.4 million.

A developer of digital technologies, e.Digital has recently staked its future on the making of portable DVD and audio players geared to the airline industry.

It began selling the eVU product last year. For the second half of 2007, it reported $1.79 million in revenue from product sales, or nearly all of its revenue for the year.

For the full year ended March 31, e.Digital reported a net loss of $3.2 million on revenue of $1.8 million. That compared with a net loss of $5.3 million on revenue of $3.2 million in the prior fiscal year.

Will Blakeley, e.Digital’s president and chief technology officer, said eVU sales are gaining momentum, and forecast revenues for the first half of the 2008 fiscal year at $3 million.

Among e.Digital’s customers for the portable digital players are Malaysia Airlines, Lufthansa and Alitalia.

Blakeley also said the firm is making headway in drumming up additional revenue streams by licensing its flash memory technology.

That all may be true, but in its annual report filed this month, the company disclosed it is a risky business for investors.

The first two points it makes under the heading Financial Risks state the company’s unbroken string of financial losses and an even scarier prospect. The report said, “Unless we obtain adequate financing and increase our revenues, we may be unable to continue as a going concern.”

As of March 31, the company held cash and equivalents of $695,000, down from more than $1 million at the end of the prior fiscal year.

As of July 23, the firm’s stock, traded under EDIG.OB, was at 17 cents, giving the business a market capitalization of $42 million. Its 52-week range is from 14 to 29 cents.

– – –


SAIC Stock Unaffected By Breach:

SAIC released disturbing news July 20 when it said personal information from 580,000 households could have been compromised when it transmitted health insurance data over an unsecured server.

Also known as Science Applications International Corp., SAIC said the mistake was made through a contract the defense contractor has with Tricare, the health benefits program for the uniformed services employees, retirees and families of those serving in the Army, Navy and Air Force, as well as those working in the Department of Homeland Security.

While SAIC said there was no evidence that data was stolen, the possibility exists. SAIC said it was doing everything it could to rectify the situation, including setting up an incident response center.

Apparently, the negative news had little effect on SAIC’s stock, which closed down 5 cents July 20, and gained 10 cents July 23 to close at $18.40.

That isn’t far removed from the $18 that SAIC achieved when it went public in October.

The stock, traded under SAI on the New York Stock Exchange, has ranged from $16.60 to $21.10 since the initial public offering.

– – –


Javo Supplies 7-Eleven Stores:

Javo Beverage, a Vista-based provider of coffee and tea drinks to the food service industry, said it signed a three-year contract with 7-Eleven Inc. to supply the convenience chain with its products.

Javo’s drinks are already available in 500 7-Elevens in the Northeast, and the deal means it will expand the service into stores in the West and East.

The companies didn’t provide how much in sales this expansion could translate to, nor how many stores the drinks would be carried in. Dallas-based 7-Eleven has more than 7,100 stores in the United States and Canada.

Traded on the Over the Counter Bulletin Board under JAVO.OB, shares closed at $1.38 on July 23, and have ranged from 81 cents to $2.22 in the past 52 weeks.

– – –


Orange 21 Talking With No Fear:

Orange 21, the Carlsbad-based maker of SpyOptic sunglasses and sports goggles, said a committee of its board is in preliminary discussions with No Fear Inc. about the acquisition of No Fear’s 40 retail stores.

Orange 21 didn’t say it had any binding agreement with No Fear, and the discussions were at the stage where “there can be no assurance that any such agreement will ever be reached.”

The company disclosed that Orange 21’s chairman and chief executive, Mark Simo, is also the founder, director and stockholder of No Fear.

Orange 21, traded under ORNG on Nasdaq, closed up 15 cents to $6.53 on July 20, the day after the news was released. It later declined to $6.51 in after-hours trading July 23. Its 52-week range is $3.25 to $6.77.

– – –


Ticker Takes:

Charlotte Russe added Michael Blitzer to its board of directors. Cymer named Motohiko Tahara president of Cymer Asia Pacific. K2 Inc. began a cash tender offer for all of its outstanding 7 3-8 senior notes due 2014. Sempra Energy dedicated the first major high-voltage underground electric transmission line in San Diego’s history called the Otay Metro Powerloop, constructed at a cost of $210 million.


Send any news of locally based public companies to Mike Allen via e-mail at

mallen@sdbj.com

. He can be reached at (858) 277-6359.

-Advertisement-

Featured Articles

-Advertisement-
-Advertisement-

Related Articles

-Advertisement-
-Advertisement-
-Advertisement-