Semiconductors were quite the spectacle in May. Take Broadcom Corp. Shares of the Irvine maker of communications chips rose 18 percent last month. Another chipmaker, Newport Beach-based Conexant Systems Inc., climbed 40 percent in May. Woburn, Mass.-based Skyworks Solutions Inc. climbed 24 percent.
The Philadelphia Semiconductor Index, a benchmark for chip stocks, was up 11 percent in May.
Could this be the start of a bigger tech rally?
Portfolio managers stocking up on semis are a sign that the tech sector is on the upswing, according to TheStreet.com. Other factors at play, according to TheStreet: lower energy prices and overall economic strength.
The chip sector’s vigor can be been seen at Broadcom.
The company recently upped its outlook for the second quarter, saying it expects sales to grow 4 percent to 5 percent from a year earlier to $575 million. Sales of chips for data storage, wireless networking, voice over Internet and videogame consoles are likely to pick up in the second half of the year, according to a recent report on Broadcom from Goldman Sachs Group Inc.
Credit Suisse First Boston recently upgraded Conexant, from “underperform” to “neutral,” which drove up the company’s shares. The investment bank said it no longer expected the chipmaker’s shares to underperform its peers.
Still, the chipmaker reported lower sales, with a 30 percent decline to $170 million for the quarter ended March 31. Conexant’s operating loss for the period narrowed by more than half, to $61 million.
Orange County Business Journal
Volcom Pricing
Surfwear maker Volcom Inc. took a step closer to going public by pricing its shares at $15 to $17.
Volcom plans to sell 4.2 million shares, with expectations of raising between $63 million and $71 million. Shareholders plan to sell another 500,000 shares, according to a filing with the Securities and Exchange Commission.
The company’s pricing lowers the expected take in the offering from an earlier projection of $86 million. Volcom hasn’t yet set a date for its offering.
Based on the midpoint of Volcom’s pricing, the company could have an initial market value of $373 million.
The Costa Mesa-based company is braving a mixed market for public offerings. Several companies have come out below their expected pricings this year. Another local company, Newport Beach-based Jazz Semiconductor Inc., withdrew its offering plans, citing market conditions.
The company, which designs edgy clothes for surfers and skaters, is set to join a select group of publicly traded surfwear makers, including industry leader Quiksilver Inc. and Billabong USA, whose parent Billabong International Ltd. is publicly traded in its native Australia.
Orange County Business Journal
Toy Story
Toymaker Jakks Pacific Inc. has acquired a line of pet toys through the Pet Pal Corp. from an unnamed privately held seller. Financial terms of the transaction were not disclosed.
The Pet Pal product line is comprised of licensed and non-licensed pet toys, treats and related products, including those based on American Kennel Club, SpongeBob SquarePants, Madagascar, Shrek and Barbie, and is currently distributed in the U.S. and Canada.
Tony Lawlor and Merritt Schoch, who managed the pet business for the selling company, have joined Malibu-based Jakks and will continue to manage and develop the line through Pet Pal Corp. at its Carlsbad offices, Jakks said in a statement.
“The Pet Pal acquisition is a wonderful complement to our growing consumer products portfolio, and one which provides further opportunities for diversification in our distribution channels,” said Joel Bennett, executive vice president and chief financial officer at Jakks Pacific.
Trial Date
A lawsuit filed by former Walt Disney Co. director Roy Disney that seeks to void the company’s last board election will go to trial Aug. 10.
Delaware Chief Chancery Court Judge William Chandler III will preside without a jury. Roy Disney and former director Stanley Gold claim investors were misled about the search for a successor to outgoing Chief Executive Michael Eisner. They said the board promised an open search when it already decided to promote company President Robert Iger to the position.
The May 9 suit was filed after Burbank-based Disney refused to provide the former board members with information about the selection process.
The lawsuit accused Disney, Iger, Michael Eisner and directors Judith Estrin, John Chen, Alwyn Lewis, Monica Lozano, George Mitchell and Leo Donovan with fraud and breach of duty of disclosure in connection with the board’s public statements about the search for a replacement for Eisner.
