Shares of Marimba Inc. (Nasdaq: MRBA) fell 10 1/8 to 47 1/4 on Wednesday after Morgan Stanley Dean Witter initiated coverage of the software company with a "neutral."
Charles Phillips based his rating on Marimba stock price, which down 20 percent from its opening price at 59 on April 30. Marimba priced its initial public offering of 4 million shares at $20 a share and the stock soared more than 200 percent in its first day trading.
Phillips also cited in his report Novadigm Inc.'s patent infringement lawsuit against Marimba for the rating. The suit is racking up substantial legal fees and has yet to go to trial, Phillips said in a report.
Marimba's Java-based Castanet products allow companies to distribute, update, and manage e-business applications and transactions over intranets, extranets and the Internet. Novadigm alleges that Marimba's technology, which makes it easier to differentiate which information should be pushed to users' desks, is similar to Novadigm's own that it patented in 1996.
On the brighter side, Phillips expects Marimba to become profitable sometime next year.