2 Companies Soar on Anthrax Rumors
Investors hunting for anti-anthrax stocks latched on to food pasteurizer SureBeam Corp. of San Diego and its parent, Titan Corp., in Wednesday’s trading, sending the stocks up 44% and 18%, respectively.
SureBeam (ticker symbol: SURE) surged $4.71 to close at $15.41 on Nasdaq, and Titan (TTN), which spun off a minority stake in SureBeam in March, rose $4 to $26.30 on the New York Stock Exchange.
It was the second straight day of robust gains for both.
Just a week ago, SureBeam stock plunged 27% in a day, after the company said it will post wider-than-expected losses in the fourth quarter and in 2002. The company has lost money all year.
But on Wednesday, U.S. Postmaster General Jack Potter announced new measures aimed at ensuring the safety of the mail system in the wake of anthrax attacks that have killed three people and infected several others.
The Postal Service has authorized at least $200 million in emergency spending to buy or lease sanitizing equipment.
Feverish speculation Wednesday on Internet message boards and stock chat rooms such as those at Yahoo’s finance channel was that Titan and SureBeam, whose system uses electron beams to sterilize medical equipment and neutralize bacteria in food, might land a lucrative federal contract.
“All I can say is that we are in discussions with various government entities,” said Titan spokesman Wil Williams.
He said the SureBeam technology “can in fact kill anthrax in the mail efficiently and quickly.”
Mike Crawford, an analyst at Los Angeles-based B. Riley & Co., said that although the technology has proven effective in other uses, the postal service would have to carefully consider “logistical issues” in implementing the system.
“Bacteria are not the only things affected. The process could change everything that’s scanned,” Crawford said.
“What if Dell ships you a laptop computer and that got irradiated? The point is there are operational issues to consider.”
Titan still owns 84% of SureBeam but plans to distribute the stock to its own shareholders next year.
Meanwhile, after surging earlier in the week, shares of another company in the food irradiation business lost ground Wednesday. Food Technology Service Inc. (VIFL) of Mulberry, Fla., whose facilities use gamma radiation on food, packaging and other consumer products, sank 35 cents to $4.70 on Nasdaq.
The stock traded for $1.61 before the Sept. 11 terrorist attacks.
And Mathews, N.C.-based Vital Living Products Inc. (VLPI), which makes water treatment products and says it has a home test for anthrax, plunged on the OTC Bulletin Board after soaring in recent days.
The stock, which traded for 10 cents before Sept. 11, sank 85 cents Wednesday to close at 65 cents.
