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Hot stocks: Dumping DaVita
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February 5, 2001: 4:32 p.m. ET
A federal inquiry sends investors fleeing from computer reseller's stock
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NEW YORK (CNNfn) - DaVita, which operates dialysis centers, tumbled 17 percent after saying federal investigators want to review the company's billing procedures and financial relationships with physicians.
But GTSI, which resells computer gear to federal, state and local governments, surged more than 40 percent after the company said last year's profit jumped more than 300 percent over 1999 levels.
Monday's losers
DaVita (DVA: Research, Estimates) down $3.25 to $15.50. The No. 2 U.S. operator of dialysis centers said federal investigators want to review the company's historical practices, including its billing and other operating procedures and financial relationships with physicians. The company said no legal process has been initiated against it, nor has it been served with any subpoena.
Exodus Communications (EXDS: Research, Estimates) down $4.44 to $18.75. The Web site manager said it plans to offer approximately 13 million shares and $500 million principal amount of its convertible notes due 2008. Exodus said it will use the money for acquisitions and business expansion.
Aradigm (ARDM: Research, Estimates) down $3.19 to $9.75. The company said it will discontinue the development of rhDNase, an aerosol-based drug delivery system, citing "commercial considerations."
Phillips Petroleum (P: Research, Estimates) down $4.78 to $53.35. The oil company plans to buy Tosco, the oil refiner, at a premium of $46.50 a share.
International Multifoods (IMC: Research, Estimates) down $3.28 to $18.25. International Multifoods has agreed to buy grain-based food businesses from Diageo (DEO: Research, Estimates) unit Pillsbury and General Mills (GIS: Research, Estimates) for a total of $305 million.
PurchasePro.com (PPRO: Research, Estimates) down $3 to $22. The e-commerce services company called an article in the Feb. 5 edition of Barron's "riddled with inaccuracies and innuendo." The article makes negative comments about a number of issues, including PurchasePro's accounting practices, its management team and its business model.
Palm (PALM: Research, Estimates) down 81 cents to $22.38. Two Chicago financiers are betting on a boom in wireless handheld devices with a venture capital fund, Nomad Venture Fund, focused on companies developing technology for devices such as those manufactured by Palm.
Monday's winners
GTSI Corp. (GTSI: Research, Estimates) up $1.68 to $5.75. The company, which resells computer gear to federal, state and local governments, of microcomputer said last year's earnings surged to $10.6 million, or $1.18 per share, up from $2.7 million, or $0.29 per share, in 1999.
Tosco (TOS: Research, Estimates) up $5.58 to $40.19. Phillips Petroleum (P: Research, Estimates) said Sunday it plans to buy Tosco for $7 billion in stock. The companies say the deal -- which values each Tosco share at about $46.50, based on Friday's closing prices -- will result in the No. 2 U.S. oil refining company.
Ultramar Diamond (UDS: Research, Estimates) up $1.93 to $32.82, Sunoco (SUN: Research, Estimates) up $1.93 to $34.60. Other oil companies rose on the Phillips-Tosco merger news.
Princeton Video Image (PVII: Research, Estimates) up 59 cents to $5.34. The company, which makes video elements that can be injected into TV broadcasts, announced a strategic alliance with cable company Cablevision Systems (CVC: Research, Estimates).
-- compiled from staff and wire reports 
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