Stock in Brightpoint Inc. tumbled 11.6 percent by mid-afternoon Tuesday after a CIBC World Markets analyst slapped the Plainfield cell phone distributor with a downgrade.
Ittai Kidron rated Brightpoint “Sector Perform” from “Sector Outperformer,” prompting investors to devalue the shares by $1.50, to $11.38.
Brightpoint has struggled to convince Wall Street of its prospects since its stock settled into the $10 to $18 range following a giddy run-up that peaked at $27.90 in April last year.
Brightpoint nearly collapsed under its debt early in the decade after recession withered cell phone sales. But profits returned with a rebound in the phone market and a restructuring of its debt. The company also has reallocated resources, such as pulling out of China and moving into India.
The CIBC downgrade is an aberration since Brightpoint announced in December that it would buy rival CellStar Corp. for $88 million. Lazard Capital Markets maintained its “Buy” rating, Jeffries & Co. reiterated its “Buy” recommendation and Cowen & Co. has stayed with its “Neutral” rating.
Assets of the Coppell, Texas, company are expected to gain Brightpoint entry into CellStar’s U.S. and Latin American markets.