U.S. News

Gateway Shares Jump Amid Takeover Speculation


Shares of Gateway, which have not traded above $3 since 2005, jumped Monday amid speculation that the computer maker may be an acquisition target.

A group of ThinkEquity analysts, in a tech industry update, said that when J.T. Wang, the chairman and chief executive of Taiwanese computer maker Acer, said the company was "hoping to make an acquisition this year," sources indicated he meant Gateway.

A U.S. representative for Taipei-based Acer was not immediately available to confirm or deny the reports.

A Gateway spokesman said the company does not comment on rumors or speculation.

Last September, the Irvine, Calif., company rejected a $450 million offer to buy its retail business.

The company said in February it planned to lay off more workers and cut $20 million to $25 million in expenses, and its fourth-quarter revenue, which fell 9%, was short of Wall Street's expectations.

Gateway had already cut nearly 100 jobs, or about 5% of its work force, in the third quarter of last year in an attempt to save between $30 million and $35 million a year.

The company has faced intense pressure from shareholders to improve its business. In late February, it named Dave Russell, executive vice president and managing director of Avalon Energy as its 10th board member as part of a deal with an activist investor group to improve the company's profitability.

Gateway's stock closed 2006 down nearly 20%, but has gained 12% since the start of the year.