Feeds

Overland to tape shares together

Reverse stock-split gives breathing space

Maximizing your infrastructure through virtualization

Overland Storage is combining three shares into one to meet Nasdaq listing rules, which require shares to trade consistently above the dollar level.

Overland has been making heavy weather of selling its tape and disk data protection products and, latterly, its Snap Server filers. It received a so-called deficiency letter from the Nasdaq Global Market authorities in October last year, after its stock price fell consistently below the required $1.00 minimum. Its share price briefly went above $1.00 in August and again in September this year but have otherwise always been under the dollar minimum. Currently its shares are trading at $0.69.

The reverse stock-split tactic has been commonly used by suppliers whose listings are threatened by a depressed share price. Sun has been the most prominent storage sector user of the tactic in recent years, with a 4:1 reverse split. Unisys followed suit in the general IT sector in October this year, with a 10:1 compression.

Overland's 3:1 reverse split looks comparatively modest. The idea is that the reverse stock split gives a company time to rebuild its revenues while still enjoying the funding and reputation benefits dependent upon a stock exchange listing. Other things being equal, the larger the split ratio, the more revenue rebuild time there is.

The split will cause shares trading at Tuesday's $0.69 price to trade at $2.07 instead. They would then have to lose slightly more than half their value to return to delisting territory. Overland CEO Eric Kelly is betting that his newly-recruited executive team and the cost-cutting measures already announced will combine with the hoped-for economic recovery and return Overland to profits and a higher share price.

Let's hope so. There are too many storage companies struggling in deep water and drowning right now. ®

The Power of One eBook: Top reasons to choose HP BladeSystem

More from The Register

next story
Sysadmin Day 2014: Quick, there's still time to get the beers in
He walked over the broken glass, killed the thugs... and er... reconnected the cables*
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
SHOCK and AWS: The fall of Amazon's deflationary cloud
Just as Jeff Bezos did to books and CDs, Amazon's rivals are now doing to it
BlackBerry: Toss the server, mate... BES is in the CLOUD now
BlackBerry Enterprise Services takes aim at SMEs - but there's a catch
The triumph of VVOL: Everyone's jumping into bed with VMware
'Bandwagon'? Yes, we're on it and so what, say big dogs
Carbon tax repeal won't see data centre operators cut prices
Rackspace says electricity isn't a major cost, Equinix promises 'no levy'
prev story

Whitepapers

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.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.