Technology sector companies having exposure on auction-rate securities (ARS) are now faced with taking impairment charges on these investments. Though ARS were pitched as a higher yield alternative to cash, the once highly liquid investments have proved less so in recent months as there have been fewer bidders in the auctions that give the securities their liquidity. Low liquidity together with widening credit spreads have resulted in large mark-downs in the value of these securities.

We used Gridstone Research’s search feature to try and find out the possible list of companies that have exposure to ARS or how widespread are the investment in ARS by technology sector companies. The results show that majority of the companies in the technology sector have investments in ARS ranging from $5 - 200 M. Some of the prominent names in the list include PALM, PRGS, HRS, MCRS, CKFR, ADCT, TKLC, BBBB, and FCS. read more…

Satyam Kumar also contributed to this note

The communications equipment industry has experienced solid market growth over the past several years, after recovering from sharp spending cutbacks in 2001 and 2002 by the service providers. Over the years the growth in communication equipments industry has been led by its primary customers, the telecommunications service providers. However, if one takes a look at the recently concluded Sep07 quarter there are some interesting trends to watch for. Current growth in the industry is being fueled by the enterprise/government customers (Exhibit 1) as enterprises look to embrace more web-based business models and upgrade their existing networks.
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