Alpha Micro Stock Soars on Software Offer
Continuing the frenetic boom of Internet stocks, Alpha Microsystems shares more than doubled after the Santa Ana-based company unveiled free software Wednesday to help investors use the global computer network.
Alpha Microsystems rose $3.38 share in heavy trading, closing at a 52-week high of $6.19 on the Nasdaq. Nearly 21 million shares traded Wednesday--a huge jump over its average volume of about 514,000--making it the fourth most active stock on U.S. markets.
The boom marks the second day of explosive trading for the software company, whose stock had been hovering around $1 a share. On Tuesday, the stock unexpectedly climbed 55%, even though the company didn’t release any news that day.
“It’s been a wild ride,” said Douglas J. Tullio, chief executive of Alpha Microsystems. “Even we were surprised at the volume of [Wednesday’s] trading. But we’ve been working hard on our product, and I think the market’s beginning to realize that.”
Founded in 1977, Alpha Micro once made computers that ran on a proprietary system. With the emergence of the less expensive, more versatile personal computer, the demand for its products dwindled and its stock price slumped.
Over time, the firm slowly shed its hardware ties, venturing instead into computer services and the development of software and business Internet applications.
The company, which went public in 1981, has about 80 employees in its Santa Ana corporate offices and 320 staffers nationwide.
The company’s new software program is BusinessVue, which provides users with online financial information from PC Quote Inc., Edgar Online and Market Guide Inc., among others. The software lets users select companies they want to watch, then compiles and tracks data such as stock quotes, regulatory filings and company profiles. The program then allows users to move this data into a spreadsheet or word-processing file.
The program can be downloaded from the company’s site on the World Wide Web. Alpha Microsystems will receive a fee from its information partners for advertisements and online transactions, Tullio said.
Tullio admits the advertising revenue model has rarely succeeded on the World Wide Web, as advertisers often can’t target consumers or track the viewing audience very efficiently.
Still, Alpha Microsystems developed BusinessVue to show off its technology, not to generate huge revenue, Tullio said.
“We expect to make less than 5% of our [annual] revenue off this,” Tullio said. “But what the program does is show companies ways they can incorporate our technology into their internal networks. That’s where we see our primary goal.”
Alpha Micro’s skyrocketing stock performance is tied to Wall Street’s current love affair with Net-based stocks. Indeed, several of Alpha Microsystems’ online partners--such as Market Guide of Lake Success, N.Y., and PC Quote of Chicago--also enjoyed sharp jumps in their stock prices.
Market Guide’s shares almost tripled on Tuesday after the company said it will provide financial information to America Online subscribers. And PC Quote hit a 52-week high on Tuesday, jumping from $1.50 to $4.38 a share in moderate trading.
Investment experts have been aghast as buyers lunged at Internet stocks big and small, many of which have failed to generate significant profits. Experts say they can understand the enthusiasm for big-name stocks, such as Yahoo and Amazon.com, but have been appalled as the trend spills over to smaller and far riskier stocks.
“What’s happening with Internet stocks, as a whole, right now is unfathomable,” said analyst John Westergaard, founder of the investment publishing group Westergaard Online. “There is excessive exuberance and hope, and I can’t imagine that it will last.”
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Alpha Microsystems stock more than doubled Wednesday after it announced it would provide its BusinessVue software free to investors. Daily closing stock prices:
Source: Bloomberg News