Stocks quoted in this article:
Yesterday, after the market closed, Foundry Networks (FDRY – 15-13/16) pre-announced fourth-quarter earnings. The manufacturer of network switching and routing equipment expects its earnings to fall into the 11-14-cents per share range. Analysts had been expecting 24-cents per share. The announcement came as a result of the impact on FDRY of reduced capital spending by the communications infrastructure sector. Knee-jerk reactions to the news had the shares trading as low as 15-1/4 in extended hours last evening. The company had its initial public offering in September 1999 and was one of the most successful launches of that year. It may now be trading back in the range of its original price.
Four Wall Street analysts have stepped forward today. Three issued downgrades on the stock while one maintained his rating. The tally currently stands at 15 "buys" or better and four "hold"
ratings for FDRY.
Short interest on FDRY more than doubled to 4.2 million shares over the most recent reporting period. Based on the 30-day average trading volume for the shares, this yields a short interest ratio of just 0.95.
On the options front, traders have configured themselves rather bullishly. The current Schaeffer's put/call open interest ratio (SOIR) for options with up to three months of life left stands at 0.24. This means that there are just 24 open put positions for every 100 open call positions.