Re: Conditional listing on the Nasdaq
The fault in delaying our anxiously awaited listing is not all with FTEL, but largely with the unresponsive Nasdaq regulators. As has been represented to me, the individuals with Nasdaq responsible for granting the listing have had the required information but the share price has not met the required $5.00 price for senior listing or the $4.00 for small-cap board listing.
In frustration, Frank and Tom (last week on the East Coast trip) deliberately met with these regulators and were told there may be a way to grant a 'conditional listing'. The conditions of this listing, in general terms are: the company meets all the necessary requirements excepting the price condition. The company can get a conditional listing and has 90 days to meet the price requirement. My understanding is this is to be at or above the necessary price for a period of ten consecutive business days or more.
This conditional listing is not a fait accompli. FTEL expects to hear from these regulators by May 7th regarding the acceptance of this conditional listing. And to introduce prudent person diligence, no one can speak for the Nasdaq boys so there is still the chance they will not grant a conditional listing and the listing process will have to be gone through again, though in a much more abbreviated time.
The company's strategy relating to the colocation process with WCOM has slightly changed since Mr. Magruder took the helm. There will be a quicker colocation of POPs in international location. The initial plan was to be largely domestic in the first phase-in of the DVGs but the new FNET management teams's experience showed the optimal positioning for revenue generation would be to get a more immediate presence in the international markets (4 international along with 8 domestic cities by July). When this gets extended to 50 cities by year-end, the high-margin revenues will be significant. Until we see their pricing plan, its difficult to assign a number to this. But the number of DVGs to accomplish this can be reasonably estimated by the technically proficient on this board.
And it must be noted that none of the above discussion takes into account the immediate focus of the sales force: the corporate intranets. DVGs are out and being tested by small, mid and large companies. The practical response for these corporations will be to eventually purchase these for intranet usage because the savings are so significant. Smaller companies are putting in their orders. But the waiting, not only for FTEL but for all other DVG suppliers, is for a large multinational to commit to the strategy of switching to these DVGs for their intranet usage. Many of these companies have their toes in the water but the process is slow for them to commit. But as RB and others have noted, the DVG testing process by proceeding is increasing the tension on that coiled spring of purchases.
I was not able to get any more info on the IPO efforts beyond what has been stated on this board. I am not able to guess at the issues viewed by the potential investment groups since I am not privy to the business plan.
Meyerson has sold a lot of shares in the last few weeks along with others. The benefit here is the money put into FTEL's coffers upon the exercise of the warrants. The curiosity is who is doing the buying? I don't feel it is normal retail purchasing. There appears to be some accumulation from groups that are positioning at a discounted price. And these groups also knew that if they were the dominance on the buy side, they could keep inching the price downwards. Kathy Green has made some good comments on the dynamics of the recent trading and I would like to hear her (and others) opinion on whether the last month has shown indications of organized accumulation.
It has been represented to me that FTEL has some news coming out which combined with the added strength of obtaining a conditional listing, should move the price back to the required $5.00 level and the listing becoming permanent. I can give no knowledge on the substance and strength of this news or how the investing dollar will respond to it. It appears the path has been outlined in the recent news releases and I hope the announcements give confirmation to the reality of stepping down this path.
Looking foreward to others adding to this brief summary of the news as I understand it.
Darrel Orpen |
