June 25, 2003 -- Share prices of data center companies have been going bananas in recent weeks, recording huge percentage gains as technology stocks enjoy a broad rebound.
The big gains are welcome news for investors who have clung to their battered shares in hopes of a rebound. It's also also good news for companies who have struggled to maintain the minimum $1 share price for the NASDAQ national market.
Leading the rally are five providers who have recorded triple-digit gains since May 1, headed by Cogent Communications with a gain of 340 percent in that period, followed by Equinix Inc. (up 206 percent), Internap (139 percent), NaviSite (up 135 percent) and Universal Access (up 116.7 percent).
It's not party time just yet, as the gains represent a rebound from severely depressed levels. But the rally offers hope that the "nuclear winter" climate for telecom and data center investment may be receding somewhat.
Several of the recent winners are among those courting customers of Cable & Wireless and Sprint, which each announced plans to withdraw from the US market. Cogent benefitted from a $41 million in new funding that allowed it to restructure its debt with Cisco Capital. Equinix has also gained funding in recent months (see related story).
But the driving force behind the rally seems to be a change in sentiment which has spurred a recovery in technology shares. Bargain hunters may see an opportunity in the data center sector among companies that have revamped their debt and cost structure.