Re: trading halt,
"Market Awaits Corel News After Trading Halt"
dailynews.yahoo.com
I'm having difficulty reading between the lines and figuring out what's going on here.
OTTAWA (Reuters) - Widely expected to announce either a financing deal or dramatic cost
cutting, embattled Corel Corp. (Toronto:COR.TO - news)(NasdaqNM:CORL - news) kept the
market guessing late on Thursday after stock trading was halted for the Canadian software
developer pending news.
My understanding is that "news" halts are for short periods of time only -- the idea being to give the company time to announce their news, give the news a bit of time to spread, and then open trading back up again. Like, a few hours, maybe a half day at the most. They really ought to resume trading by noon Friday, at the latest.
Corel ought to know this, so they must have the "news" more or less ready to announce (perhaps by 8am or 9am Friday?). We should know soon. Or, the TSE ought to just resume trading, if Corel isn't forthcoming with the news in a timely manner.
The company did not return several calls.
``The financing is well under way and we expect some good things to be announced in the short
term,'' chief executive Michael Cowpland told Reuters on Thursday before trading was halted.
He added that news on the cost-cutting plan was ``a couple of weeks away''.
Hmmm, "in the short term". It darn well better be more or less immediate, or I would imagine that the TSE would be unhappy. They (TSE) can just "turn the machines back on", you know.
Cowpland says news of the cost cutting plan won't be available immediately, so that's not it....
Ottawa-based Corel, which expects to lose money for the next two quarters, has faced a cash
crunch with the death of its bid for California's Inprise/Borland Corp. (NasdaqNM:INPR -
news) on May 16. Corel said at that time it was evaluating financing options and also planned to
cut $40 million in annual expenses.
OK, so might they be announcing their financing (cash-raising) options?
Corel, best know for its word-processing and graphics
software until last year's push into the Linux market, warned
it could run out of cash by July if the Inprise/Borland merger
failed or it didn't find financing.
The merger's collapse withdrew Inprise/Borland's $240-
million cash reserves from Corel's reach and nixed a $29.5- million termination fee.
Analysts and market watchers are now waiting for details of how Corel will replenish its cash
and cut costs. Savings are widely expected to stem from layoffs of the company's 1,391
full-time staff, or about 1,500 employees including part-time, student and co-op staff.
Cowpland said on May 16 that his company is not mulling any takeover bids, nor discussing any
acquisitions or mergers.
OK, so if he is not going to take someone over, or be taken over, then all that that leaves (that I can think of) is:
A) They're going to announce some sort of (toxic?) equity private placement (which I have previously said they won't be able to do -- perhaps I'm about to be proven wrong?)
B) They're going to announce CCAA (Canadian equivalent of Chapter 11)
Anyone else care to speculate and ponder over this one?
- Daniel |
