By Dan Gallagher, MarketWatch
SAN FRANCISCO (MarketWatch) -- Tech stocks took a strong hit
from a broad market selloff Monday, though Sprint Nextel Corp.
still saw its shares jump to a multiyear high after Dish Network
Corp. announced an unsolicited buyout bid for the
telecommunications carrier.
The Nasdaq Composite Index (RIXF) fell 1.2% to 3,254 while the
Philadelphia Semiconductor Index (SOX) fell 1.5% and the Morgan
Stanley High-Tech Index (MSH) fell 0.8%.
The broad market fell -- pushing the Dow down more than 115
points -- following data from China that showed economic growth
slowing.
Sprint (US-S) shares surged more than 13% to $7.07 by midday --
putting the stock above the $7 mark for the first time since fall
2008.
Dish Network Corp. (DISH) announced an unsolicited $25.5 billion
bid for Sprint that involves about $4.76 per share in cash and
about $2.24 per share in Dish stock. The proposed deal could derail
a pending merger between Sprint and Softbank Corp., the Japanese
telecommunications giant that offered to buy about 70% of Sprint in
a $20 billion deal.
In a conference call on Monday morning, Dish chairman Charlie
Ergen touted the advantages his company could bring compared with
Softbank, including a large block of domestic spectrum.
"Obviously, we're talking about bringing some things that
SoftBank just can't bring to create a superior company," he said on
the call, adding that his offer also brings about $24 billion in
"new opportunity synergies" to the deal.
Sprint issued a brief statement saying it had received the Dish
offer and that its board of directors "will evaluate this proposal
carefully and consistent with its fiduciary and legal duties."
Dish shares fell 6% to $35.36. Rival carriers AT&T (T) and
Verizon (VZ) each fell by a fraction. Verizon has reportedly
offered to pay about $1.5 billion to acquire wireless spectrum from
Clearwire (CLWR) , according to The Wall Street Journal. Clearwire
shares were last trading down 2.5% to $3.18.
Smaller carriers MetroPCS (PCS) and Leap Wireless (LEAP) were
each down more than 2%.
Google (GOOG) shares were down about 0.4% following reports that
the company had made a proposal to tweak its search results to ease
anticompetitive concerns raised by the European Union.
Among other large-cap techs, Apple (AAPL) , Facebook (FB) and
NetApp (NTAP) were all down more than 1%.
Netflix (NFLX) was one of the few gainers, with its shares up
4.7% to $181.36.
BTIG analyst Richard Greenfield initiated his coverage of
Netflix with a buy rating and $250-a-share price target. In a
research note, Greenfield said, "The improving Netflix price/value
relationship, along with high-quality, proprietary original
programming will drive better than expected subscriber growth and
moderate [subscriber] churn."
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