ONIS insiders bailing out.
<< ONI Systems Corp. (ONIS) shocked the market last week with announcements of a secondary offering of 8 million shares -- only 5 million of which are being sold by the company -- and the early release of 14.3 million shares owned by insiders.
"We have a hold on the stock -- we're not a big fan," says
Gina Sockolow, an analyst who follows the company for New York's Brean Murray & Co.
Less than 20% of ONI's 123.7 million outstanding shares were free to trade after the optical-communications company's June 1 IPO. Lead underwriter Goldman Sachs & Co. had imposed the traditional 180-day lock-up on most pre-public investors and other insiders.
On Sept. 28, however, ONI announced the twin moves to add capital to the firm -- and to certain of its insiders. In this filing,
edgar-online.com
ONI listed to offer 8 million of its shares, 63% of them being sold by the company, and 37% by insiders.
The filing also revealed that Goldman released 14.3 million shares on Oct. 2 that had been locked up through December. According to the filing, these shares are owned by stockholders who have agreed to enter into new lock-up agreements in connection with a proposed
offering of $250 million of convertible subordinated notes due 2005.
Selling shareholders have flooded the SEC with Form 144 filings, Intent to Sell Restricted Stock. Some 51 of them have been filed since Sept. 14.
edgar-online.com
ONI and its investors are taking advantage of a blistering market for optical communications gear. After a pricing of $25 in the IPO, the company's shares shot as high as $142, but at press time were trading at $69.19 -- still a 176% increase over the IPO price.
The new shares are equal to about 18 days of trading volume in ONI, which in the latest 12 months lost $46.6 million on sales of $3 million. [I think the sales figure is an error. BP] Wall Street analysts expect the company to trim its losses from 75 cents a share this year to 39 cents in 2001.
One online newsletter that tracks the optical networking industry, says some Wall Street analysts defend the stock sales, saying the
market for the company's shares is strong enough to support the new supply. However, it says, "The market isn't quite sure how to react." >>
BP |
