Feeds

Unisys announces 10-to-1 stock compression

Never mind the price, feel the width

Next gen security for virtualised datacentres

Struggling server and services company Unisys said this morning that its board of directors had authorized a reverse stock split for the company's shares, collapsing 10 shares down to one and thereby making its stock appear to be worth ten times as much to the automated trading systems that are trained to get nervous when stock values go near a few bucks, and get downright jittery when they approach a buck.

Shares in Unisys trade on the New York Stock Exchange, and were flat at the news that the board had decided on a 10-to-1 compression at a share price of $2.77. That gives Unisys a market capitalization of $1.03bn, which is a lot better than back in March 2009, when Unisys shares were trading at 28 cents a pop. This was even lower than the bottom the shares hit when the economic meltdown was roaring in November and December last year. At the time, revenues were dropping at the company and it went deeper into the red than usual.

However, by the end of the second quarter, Unisys had cut costs and grew sales sequentially to $1.13bn, managing to bring $38.1m in profits to the bottom line. Things were on the upswing. But at its annual shareholders meeting in May, shareholders were not as optimistic as they probably are now, and they gave the Unisys board permission to compress the stock by anywhere from between 5 to 20 times the current price, which was north of $1 a share.

As Unisys has stabilized, however, its shares have pushed up on their own, without the need for the reverse stock split. But the board decided today to do it anyway, so on October 26, the company will issue 72 million new shares and retire 720 million old shares. If current trends persist and the third quarter is not awful, Unisys stock should soon be trading at around $30 a pop.

What Unisys might have done, when its stock was in the tank back in March, was take itself private and be done with the nagging of Wall Street altogether. Unisys had $720.8m in accounts receivable and $468.7m in cash and equivalents, and could have done so easily.

Imagine if Sun Microsystems had been this smart a few years ago, when its stock was in the tank and it had billions of dollars in cash in the bank. But in September 2007, Sun decided to change its stock symbol from SUNW to JAVA and do a 4-to-1 reverse stock split instead.

At least Unisys isn't changing its stock ticker to SERV from UIS and touting itself as a services giant. But it may have missed an opportunity back in March to untether itself from the taskmasters on Wall Street and run its business its own way, on its own terms. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Kaspersky backpedals on 'done nothing wrong, nothing to fear' blather
Founder (and internet passport fan) now says privacy is precious
TROLL SLAYER Google grabs $1.3 MEEELLION in patent counter-suit
Chocolate Factory hits back at firm for suing customers
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
Facebook, Google and Instagram 'worse than drugs' says Miley Cyrus
Italian boffins agree with popette's theory that haters are the real wrecking balls
Sit tight, fanbois. Apple's '$400' wearable release slips into early 2015
Sources: time to put in plenty of clock-watching for' iWatch
Facebook to let stalkers unearth buried posts with mobe search
Prepare to HAUNT your pal's back catalogue
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Advanced data protection for your virtualized environments
Find a natural fit for optimizing protection for the often resource-constrained data protection process found in virtual environments.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.