The past two days have been very good to shareholders of Aether Systems Inc. The Owings Mills companys shares rocketed $45.375 yesterday to close at $258.375. Those pyrotechnics followed a gain of $39.25 per share Monday.
This 49 percent two-day rise has been caused in no small part by the same factor that has caused Aethers stock value to rise 16-fold since its Oct. 21 initial public offering -- investors fascination with technologies that allow people to tap into todays torrent of information anywhere, anytime.
Aether has released no announcements or statements that might contribute to a run-up, and companywatchers reported no rumors of takeover activity. Greg Lampf, Aethers director of investor relations, said he was at a loss to explain Mondays spike, but he said yesterdays rise was aided by a new buy rating issued on the company by Deutsche Banc Alex. Brown. The firm set a $250 price target for Aether, a threshold that was easily passed in yesterdays trading.
Lampf dryly noted that such a report has a tendency to bring prices up.
Samuel S. May, an analyst with U.S. Bancorp Piper Jaffray Inc. in Menlo Park, Calif., said Aethers trajectory is the result of the simplest of economic rules: When lots of people want to buy something thats in short supply, prices go north.
There are not enough sellers of Aether stock, May said. Its just a very thin supply. Aether is planning to hold a secondary offering in about three weeks, but demand for the companys shares could continue to far outstrip supply if the wireless-communications market remains so strong. Aether stands at the sharp vanguard of that market; the companys core product is software that allows customers to get up-to-the-second stock information and other news on their Palm Pilots or other handheld devices.
The company is making moves to broaden its offerings and boost its profile. The companys shares rose 23 percent Feb. 10 after the company announced its purchase of Vienna, Va.-based Riverbed Technologies Inc., which sells software that enables various types of digital devices to communicate with each other.
In addition, Aether has begun an aggressive national marketing campaign through Baltimore-based Gilden Advertising, with $12 million budgeted for media placements over six months. The company bought a full-page ad in the Wall Street Journal in January, and will soon trot out commercials over broadcast and cable television.