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O.C. BUSINESS PLUS | ORANGE COUNTY BRIEFLY

Broadcom's Stock Heads Up on Move Into Fiber Optics

May 03, 2000|Karen Alexander

Investor enthusiasm over Broadcom Corp.'s entrance into the fiber-optic networking market lifted the Irvine chip maker's stock 4.5% Tuesday, a day when the broader tech sector lost ground.

Broadcom closed at $182 in Nasdaq trading, an increase of $7.75 a share.

James Ragan, a senior analyst at brokerage Crowell, Weedon & Co. in Los Angeles, attributed the stock boost to the company's improved long-term prospects after its announcement Monday of a new chip, which is faster and cheaper than others available.

"This signifies longer term that they're going to be a player in the optical networking space," he said.

Broadcom is the dominant chip maker for broadband, or high-speed, communications over standard copper wires. Its entrance into the expanding fiber optics market puts it squarely up against leaders such as Conexant Systems Inc. in Newport Beach.

Conexant's shares fell 8%, or $4.63 a share, to close at $55.44 a share Tuesday. The Nasdaq dropped 172.63 points, a 4.36% decline.

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