Shares in famed computer maker Gateway Inc. shot up as much as 8.4% Monday, and closed up 6.7% on speculation it may be an acquisition target. A group of ThinkEquity analysts said in a note yesterday that when Acer Inc. CEO J. T. Wang said his company was "hoping to make an acquisition this year," he meant Gateway. Spokesmen from both companies declined to comment on the speculation. In September, Gateway rejected a $450 million offer for its retail business. Last month it said it would lay off more workers and cut $20-25 million in expenses. Its Q4 revenue, which dropped 9%, missed Street forecasts. Activist investor and 10.7% shareholder Harbert Management/Firebrand has been pressuring Gateway to de-classify its board and appoint three of its designees to the board, saying in a letter to its CEO: "There is nothing wrong with Gateway that can't be fixed with what's right with Gateway."
Sources: AP, Seeking Alpha
Commentary: Consumer PCs: HP and Gateway are Hot, Dell is Not • Conflicting Calls On PC Sector: Sell Dell, Buy Gateway • Gateway Reports Solid Quarter But Problems Linger
Stocks/ETFs to watch: Gateway Inc. (GTW). Competitors: Dell Inc. (DELL), Hewlett-Packard Co. (HPQ), Lenovo Group Ltd. (OTC:LNVGY), International Business Machines Corp. (IBM). ETFs: SPDR Technology (XLK), iShares Goldman Sachs Technology Index Fund (IGM), iShares Dow Jones US Technology Index (IYW)
Conference call transcript: Gateway Q4 2006 Earnings Call Transcript
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