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Patent OK Sends STM Wireless Stock Up 51%

October 24, 2000|Dow Jones

Shares of STM Wireless Inc. jumped 51% after the Irvine maker of satellite communications networks said Monday that it had earned a patent for a new technology that will reduce the cost of broadband communications via satellite.

STM's stock gained $2.63 to close at $7.81 a share in heavy Nasdaq trading. During the day, the price hit as high as $9.69 a share before settling back. More than 2.1 million shares traded hands, about 24 times the daily average number of shares traded in the past three months.

Company officials couldn't immediately be reached for comment, but in a press release, the company said its new form of code division multiple access technology, or CDMA, represents "a major milestone."

However, market watchers were cautious in evaluating the future impact of the new technology on the company's revenue.

"It's difficult to predict," said Discovery Group Inc.'s Gunter Karger, one of the two analysts who cover the stock. Karger said Monday's price represented a good profit-taking opportunity.

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