Orange County Business Journal

Emulex Shares Fall on Downgrade

Chris Casacchia Monday, June 25, 2012

Shares of Emulex Corp. sank Monday after an analyst downgraded the Costa Mesa networking electronics maker.

Investors sent shares down 9.6% in afternoon trading to a market value of about $588 million after San Francisco-based investment bank ThinkEquity LLC downgraded the company to “hold” from “buy” and cut its price target to $8 from $12.

Emulex designs and makes networking equipment that connects storage, servers and data centers. It is among a burgeoning group of networking-equipment makers competing in the emerging 10-gigabit Ethernet connection market for data centers.

Such technology is seen as an improvement over fibre-channel and 1-gigabit connections, which are prevalent in data centers today.

For years the company has battled Aliso Viejo-based rival QLogic Corp., the market share leader in fibre-channel adapters and another 10-gigabit player.

Emulex spun off QLogic in the early 1990s.