TECH STOCKS: Sprint Shares Jump While Tech Stocks Slide

By Dan Gallagher, MarketWatch

SAN FRANCISCO (MarketWatch) -- Tech stocks took a strong hit from a broad market selloff Monday, though Sprint Nextel Corp. still saw its shares jump to a multiyear high after Dish Network Corp. announced an unsolicited buyout bid for the telecommunications carrier.

The Nasdaq Composite Index (RIXF) fell 1.2% to 3,254 while the Philadelphia Semiconductor Index (SOX) fell 1.5% and the Morgan Stanley High-Tech Index (MSH) fell 0.8%.

The broad market fell -- pushing the Dow down more than 115 points -- following data from China that showed economic growth slowing.

Sprint (US-S) shares surged more than 13% to $7.07 by midday -- putting the stock above the $7 mark for the first time since fall 2008.

Dish Network Corp. (DISH) announced an unsolicited $25.5 billion bid for Sprint that involves about $4.76 per share in cash and about $2.24 per share in Dish stock. The proposed deal could derail a pending merger between Sprint and Softbank Corp., the Japanese telecommunications giant that offered to buy about 70% of Sprint in a $20 billion deal.

In a conference call on Monday morning, Dish chairman Charlie Ergen touted the advantages his company could bring compared with Softbank, including a large block of domestic spectrum.

"Obviously, we're talking about bringing some things that SoftBank just can't bring to create a superior company," he said on the call, adding that his offer also brings about $24 billion in "new opportunity synergies" to the deal.

Sprint issued a brief statement saying it had received the Dish offer and that its board of directors "will evaluate this proposal carefully and consistent with its fiduciary and legal duties."

Dish shares fell 6% to $35.36. Rival carriers AT&T (T) and Verizon (VZ) each fell by a fraction. Verizon has reportedly offered to pay about $1.5 billion to acquire wireless spectrum from Clearwire (CLWR) , according to The Wall Street Journal. Clearwire shares were last trading down 2.5% to $3.18.

Smaller carriers MetroPCS (PCS) and Leap Wireless (LEAP) were each down more than 2%.

Google (GOOG) shares were down about 0.4% following reports that the company had made a proposal to tweak its search results to ease anticompetitive concerns raised by the European Union.

Among other large-cap techs, Apple (AAPL) , Facebook (FB) and NetApp (NTAP) were all down more than 1%.

Netflix (NFLX) was one of the few gainers, with its shares up 4.7% to $181.36.

BTIG analyst Richard Greenfield initiated his coverage of Netflix with a buy rating and $250-a-share price target. In a research note, Greenfield said, "The improving Netflix price/value relationship, along with high-quality, proprietary original programming will drive better than expected subscriber growth and moderate [subscriber] churn."

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