Tech stock roller-coaster: Facebook, Cisco up and AMD down

We’re watching some big Silicon Valley movers on the stock markets today, in the context of some notable developments:

Facebook shares are rising sharply, more than 9 percent to $21.70 as of this post, on the lockup expiration day of the biggest block of insider shares yet — as many as 800 million shares, as the Merc’s Brandon Bailey noted. Shares of the world’s largest social network had been falling recently ahead of today’s expiration, but now experts are saying the fear is “subsiding” and those thinking long term are not selling, according to Reuters.

An analyst tells the Wall Street Journal that “everything would seem to indicate the market is losing its appetite to short Facebook.” It’s possible short sellers think shares of the Menlo Park company can’t fall much further. Facebook, which in May had an IPO price of $38, has had a couple of previous lockup expirations.  Its shares plunge to a closing low of $17.73. The company has recently talked up its efforts to bring in more revenue from ads and more.

Facebook has two more lockups set to expire, in December and in May, but they involve smaller blocks of stock.

• Also shooting up are shares of Cisco Systems; they were up more than 6 percent to $17.94 as of this post. Tuesday, the San Jose networking company and tech bellwether reported first-quarter results that beat expectations, with profit rising 18 percent and revenue climbing 5.5 percent.

The good news, CEO John Chambers reportedly said during the conference call, is that U.S. businesses are picking up spending. However, he said the European economy continues to be a concern. “The U.S. has to lead the total globe out of this slowdown. It’s not going to come from Europe. While we were all hopeful about emerging countries, they just aren’t going to be strong enough,” Chambers said.

Cisco’s sales were helped by its purchase of video-software maker NDS Group, but revenue from switching and routing each fell 2 percent from the year-ago period, according to the Wall Street Journal. Chambers blamed slow demand from European businesses.

• AMD shares are pulling back, giving back most of its gains the day after Reuters reported that the Sunnyvale chip maker has hired JPMorgan Chase to explore options that include a possible sale. Shares of Advanced Micro Devices surged as high as 18 percent during the day Tuesday and ended 5 percent higher. They’re down more than 4.5 percent to $2 as of this post.

AMD has denied that it’s exploring a sale; the Reuters report says the company’s other options include selling its patents. AMD, whose tardiness to the smartphone and tablet party has caused changes at the top (CEO Dirk Meyer was forced out last year and replaced last August by Rory Read) and other measures such as layoffs, which Read announced last month along with third-quarter earnings that missed expectations. (See Earnings fallout: AMD shares plunge 15 percent.)

 

 

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