NEW YORK (AP) — Shares of Acme Packet slid 7 percent Wednesday as Jefferies & Co. downgraded the stock, citing a faster investment transition by phone companies from traditional phone lines to wireless.
THE SPARK: Analyst James Kisner cut Acme Packet to "Hold" from "Buy" and reduced its price target by nearly half, taking it to $21 from $40.
THE ANALYSIS: Kisner said phone companies are spending more of their money on wireless these days and that the pause North American phone companies are taking in investing in traditional phone lines will make it hard for Acme Packet to meet Wall Street's expectations during the second half of the year.
Acme is a Phone and data network equipment maker.
Kisner believes that shares in the that Bedford, Mass., company is still somewhat expensive despite a recent sell-off.
SHARE ACTION: Shares of Acme Packet Inc. fell $1.55 to $20.36 in morning trading. The stock at one point hit a two-year low of $20.21 and shares are down about 32 percent for the year.