AST Stock Takes Off on New Computers : High tech: The firm has begun volume shipping of its Premium Exec notebook computers. Analysts said that, along with news that the company will issue 2 million more shares of stock, inspired investor confidence.
AST Research Inc.’s stock price soared 14.4% to a new record Friday as the company unveiled an inexpensive, high-end notebook computer and said it has begun large shipments of its initial lightweight notebook machines.
The company’s stock closed at $52.50, up $6.625 a share in over-the-counter trading on Friday. More than 1.28-million shares traded hands, making AST one of the most active stocks on the exchange.
The surge in the price caps a remarkable rise in AST’s stock in the past three months. The stock has more than doubled since mid-November and increased fourfold from a year ago on the strength of new products and expansion into new markets.
On Friday, AST said it has begun volume shipping of its Premium Exec notebook computers, which weigh 6.5 pounds and have the computing power of a desktop computer. The two models carry 20 megabytes and 40 megabytes of memory and are based on the Intel 80386SX microprocessor, which performs the main computing functions in a computer.
Analysts said the announcement, fueled by earlier news that the company will issue 2 million more shares of stock to raise working capital and split its stock 2-for-1 this month, inspired new investor confidence that drove the stock to its all-time high on Friday.
“It’s not exactly ‘new’ news, but sometimes that’s all the catalyst investors need to start buying a stock,” said Mary Meeker, analyst for the investment banking firm Cowen & Co. in New York. “We still think it is undervalued.”
Tom Yuen, co-chairman and chief operating officer of AST, said he believed the stock increase was due to the company’s announcement that it was able to ship its notebook computers on its previously announced schedule despite widespread reports of parts shortages in the industry.
“There was a level of skepticism that we could deliver what we promised in volume,” Yuen said. “I think there was concern we were considering a much larger stock issuance to bring in more money, but it’s a reasonable level and so that created confidence.”
The company also said that it began shipping a notebook model with 60 megabytes of memory in a hard disk drive, a level of memory that gives the computer user the ability to run programs that normally require desktop computers.
The machine won’t be shipped in volume quantities for some months--until AST can secure a steady supply from disk-drive manufacturers such as Conner Peripherals Inc. in San Jose. Another notebook model, based on the less-powerful Intel 80286 microprocessor, will be shipped in volume in mid-March, Yuen said.
The larger memory component for the 60-megabyte version positions the company to compete with the latest offerings from Compaq Computer Corp., as well as the long-expected notebook from International Business Machines Corp. due out next month, Meeker said.
AST’s 60-megabyte model matches the amount of memory in the top-of-the-line machine from Compaq, the LTE 386/s20. But while the Compaq machine carries a list price of $6,995, AST’s 60-megabyte machine will sell for $3,795. IBM is also expected to announce a 60-megabyte machine based on the 386SX microprocessor in March.
But Yuen said he believes the true high end of the notebook market will emerge later this year with the introduction of a number of larger, laptop-sized computers with color displays and 80 megabytes of memory.
“That will come out in the later half of this year from AST,” Yuen said. “As the notebook market potential becomes greater than the desktop, I think we will see a whole new bunch of computer buyers.”
Those color laptop machines, which could be shipping in volume by Christmas, could offer desktop-style color quality at a slight sacrifice in battery life and weight, Yuen said. Toshiba America Information Systems in Irvine is shipping such a machine, weighing 17 pounds, now, but Yuen said several other manufacturers will soon enter that market.
The company said it has made capital investments and hired more people at its manufacturing plant in Fountain Valley to support the notebook production. But Yuen said the company is being cautious in adding nonproduction staff in the current economic climate.
UPS AND DOWNS, MOSTLY UPS, OF AST RESEARCH STOCK
Week Week’s Last Ending Volume Close/Bid 2/02/90 1,107,500 12 3/4 2/09/90 1,773,700 14 3/8 2/16/90 755,500 15 2/23/90 499,800 14 5/8 3/02/90 1,606,900 16 3/09/90 2,871,100 14 7/8 3/16/90 1,406,000 16 1/4 3/23/90 2,102,100 17 1/4 3/30/90 699,600 16 3/4 4/06/90 2,349,600 19 1/2 4/13/90 1,199,300 20 3/8 4/20/90 2,914,900 21 1/4 4/27/90 1,046,200 20 5/8 5/04/90 2,622,800 23 1/4 5/11/90 802,800 23 1/4 5/18/90 1,397,700 23 1/2 5/25/90 2,339,500 23 5/8 6/01/90 1,767,900 25 3/8 6/08/90 1,521,000 23 7/8 6/15/90 1,017,900 23 3/4 6/22/90 1,862,400 22 6/29/90 1,290,800 23 7/8 7/06/90 1,009,700 24 1/4 7/13/90 1,871,200 25 1/8 7/20/90 2,250,000 22 7/27/90 6,200,200 23 3/8 8/03/90 3,755,100 20 8/10/90 1,482,700 19 7/8 8/17/90 1,659,300 18 7/8 8/24/90 1,458,400 17 1/4 8/31/90 1,069,300 18 1/8 9/07/90 818,000 17 1/4 9/14/90 1,923,400 18 7/8 9/21/90 1,159,800 18 3/4 9/28/90 1,514,000 16 3/4 10/05/90 2,310,600 17 3/8 10/12/90 2,356,300 16 10/19/90 4,770,100 18 5/8 10/26/90 2,035,500 19 1/8 11/02/90 1,961,400 22 3/8 11/09/90 2,079,200 24 11/16/90 1,883,900 25 1/4 11/23/90 1,085,300 25 3/4 11/30/90 1,841,800 27 1/8 12/07/90 2,525,300 29 3/4 12/14/90 1,986,400 27 3/8 12/21/90 3,704,400 33 3/4 12/28/90 952,900 35 7/8 1/04/91 2,426,800 34 1/11/91 2,394,100 34 1/18/91 3,079,100 40 3/4 1/25/91 1,994,900 40 3/4 2/01/91 2,424,200 47 2/08/91 2,850,700 44 1/2 2/15/91 2,345,300 44 3/4 2/22/91 2,089,700 52 1/2
Source: Dow Jones
