Atmel shares fall on downgrade
Atmel Corp.'s shares dropped Monday after a UBS analyst downgraded his rating on the company, which makes microcontrollers for mobile touch-screens.
THE SPARK: UBS analyst Steven Eliscu cut his rating on the company's stock to "Neutral" from "Buy," and said he expects the need for its products will be much lower than previously anticipated. He also lowered his price target for its stock to $7 from $11.
THE ANALYSIS: Eliscu said that he used to believe that Atmel's had the top-end touch controllers, which would allow it be a leader at the high-end of the market. However, it appears Korean supplier Melfas may displace Atmel as the vendor of choice for Samsung for its high-end touch screen needs.
Atmel also could also potentially be the leader in Windows 8 devices, but the analyst expects the launch and popularity of those will be slower to develop. This would keep a damper on any demand for Atmel's products.
SHARE ACTION: Shares of Atmel fell 43 cents, or 6.8 percent, to end Monday's session at $5.91. Its shares have traded erratically during the past 52 weeks, ranging from $5.34 to $11.72. Its stock began to dive in March, after closing at $10.85, and has yet to rebound.