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Fore shares trade hot on merger fever

Shares of the high-speed networking specialist jump as the company is caught in merger fever.

High-speed networking specialist Fore Systems appears to be caught in merger fever.

Wireless giant Ericsson has been linked to the maker of data network switching equipment of late, largely a result of Fore's lagging sales and vulnerable position as a relatively small player in a market for networking equipment that is now dominated by multibillion-dollar giants.

Fore experienced a noticeable spike in its trading volume last Friday, as shares jumped 2.5 to close at 17 on more than 28 million shares. That was followed by another busy day today, as the company's stock soared 10 percent to close at 18.6875 on more than 16 million shares.

Ericsson has made it clear it intends to be one among a number of international telecommunications companies attempting to expand their role on the Internet by latching onto the data equipment market through acquisitions.

Rumors continue to circulate that Ericsson turned its attention to Fore after being outbid for Redstone Communications last week by another technology giant, Siemens.

Ericsson has been quiet, while the likes of Siemens and Alcatel have bolstered their presence in the data networking market in recent months.

Ericsson executives have made no secret of their interest in data networking companies. "We certainly are looking," a spokeswoman said.

A Fore spokesman declined comment on the acquisition rumors.

Newbridge Networks has also been linked to Fore as a possible suitor.

Last month, Fore's shares fell 16 percent after the No. 7 networking-equipment maker said sales in the fourth quarter ending March 31 were lagging forecasts, prompting concern that earnings may fall short of consensus estimates.

Bloomberg contributed to this report.