In fact, Juniper's stock today hit an all-time low, down $0.08 (0.94%) to $8.43. But more telling, Juniper shares have lost 30 percent of their value in the last month, and 90 percent of their value in the last year. This week marks the first extended time Juniper's shares have dwelled in the single digits since its initial public offering in 1999. Shares briefly dipped below $10 in 2001.
There has been no shortage of reasons for the weakness in Juniper's shares. These include a bad telecom market, recent management shifts, the rumors that Juniper CFO Marcel Gani may be considering jumping to a startup, and the possibility that a Juniper acquisition could dilute shareholder value.
The company has reportedly been looking to expand its entrance into the edge routing business via acquisition, with one potential candidate being Unisphere Networks Inc. (see Juniper Scoping Out Unisphere?). A lower share price could scuttle such a deal, since Juniper's currency for such an acquisition would likely be its stock.
"Some investors may have been worried that, if Juniper is on the prowl, it would pay too much for Unisphere," says Gabriel Lowy, an analyst at Credit Lyonnais Securities, who observes that watching day-to-day stock movements in the telecom sector can be trying, because there is so much fear in the sector.
Other concerns may loom larger, most notably concern about Juniper's major customers. Here's a list of some of the issues dogging Juniper's share price:
Juniper says that while investors use its stock price to keep score, it is mainly concerned about winning new customers and taking care of old ones. "Today Juniper has more than 500 customers, more than double what it did in 2001," says Adam Stein, Juniper's director of corporate marketing. "That said, those customers are spending frugally right now."
Juniper says it won't comment on personnel issues.
Meanwhile Juniper, a smaller company with a more focused business, reported net revenues for 1Q02 that were 63 percent less than the company's year-ago results (see Juniper: No Surprises).
On the other hand, Juniper isn't standing still, and its product strategy looks to be solidly on track. The company just announced its T640 core router along with four paying customers (see Juniper Goes Terabit With the T640).
- Phil Harvey, Senior Editor, Light Reading