Rumours resurfaced on Thursday that Sun will buy Netscape. Though analysts are sceptical, shares in the company were traded feverishly on Wall Street, sending the stock price soaring.
Although analysts were casting doubts on the likelihood of a takeover, quite a number of investors appeared to take the rumours seriously enough. Share price shot up almost 30 per cent to $25.56. More than 30 million shares ? or one-third of the company - changed hands during the day.
At the current stock price, Netscape is valued at about $2.5 billion.
Earlier this year, Netscape decided to give away its Web browser for free and publish the sourcecode. The company also announced about 400 lay-offs.
A Netscape spokesperson said the company has a policy not to comment on market rumours and Sun did not return calls. No reference to a possible buyout was made during Thursday?s conference call announcing Sun?s quarterly results.
?We?re scratching our heads and saying ?what are they (Sun) getting out of this??," commented Jim Balderston, an analyst with Zona Research in Redwood City, California. ?The cachet Netscape brings to the table is dwindling every day. If all they want to do is keep the ?anyone but Microsoft? alliance together, this is a very high price to pay."
?It?s certainly good for Netscape that these rumours are circulating at this time," added Balderston. ?Their [quarterly] earnings are due soon. If they?re bad, takeover rumours will hold the stock up."
In its quarter ended December 1997, Netscape for the first time in its history saw falling sales, damaging its already tarnished image.
In February, Netscape changed its fiscal year to align it with seasonal buying patterns. Its fiscal year now ends on 31 October instead of 31 December. As a consequence of the change, Netscape will not publish earnings this month, but will rather announce results for January together with those for the February-March-April quarter.
Netscape was not the only Internet stock to shoot up on Thursday. Search engine suppliers Yahoo!, Infoseek, Excite and Lycos all ended the day sharply higher.
Cotton seedling freezes to death as Chang'e-4 shuts down for the Moon's 14-day lunar night
Fortnite easily out-earns PUBG, Assassin's Creed Odyssey and Red Dead Redemption 2 in 2018
Meteor showers as a service will be visible for about 100 kilometres in all directions
Saturn's rings only formed in the past 100 million years, suggests analysis of Cassini space probe data
New findings contradict conventional belief that Saturn's rings were formed along with the planet about 4.5 billion years ago