Redback subject of buyout rumors

Redback's (rbak) stock, at one time trading at nearly $200 in the past year, has fallen more than 75 percent. The company's market capitalization stands at less than $5 billion, making it a more attractive target as an acquisition, according to analysts. Possible suitors may include Nortel Networks, Cisco Systems, Juniper Networks, Alcatel and Nokia, analysts said.

"Where there's smoke, there's usually fire," said Paul Johnson, analyst with Robertson Stephens, of the ongoing rumors surrounding Redback.

SG Cowen analyst Michael Jung said it's conceivable Redback could be for sale, given that its market valuation has fallen, but it's unlikely the company wants to give up its independence. "They're still building their businesses and forecasting a healthy 2001," he said. "They are one of the few companies that raised their guidance after the fourth-quarter results."

Redback representatives declined to comment on the rumors. -- Ben Heskett and Wylie Wong, Special to ZDNet News