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Technology Stocks : China.com Corp-(CHINA) -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (353)	7/22/1999 4:35:00 AM
From: eCurl	Read Replies (2) \| Respond to of 504

Even though I may get some flack for posting negative news on CHINA here, I still thought it is worth sharing it. Potential management issue that needs to be looked into? eC ____________________________________________________________________ China.com Staff Lament Over Share Of IPO Pie By Hans Lombardo Managing Editor, asia.internet.com [July 22, 1999--HONG KONG] Employees at China.com Corp (CCC), which recently listed on the Nasdaq, are disgruntled over not being given sufficient shares in the company, according to sources and the local press. A report in Hong Kong's Technology Post indicated that the company's management had given few rank-and-file employees stock options. Moreoever, the paper reported that only board chairman Raymond Ch'ien, chief executive Peter Yip, five other directors, and 'friends' of the board received substantial shares with some acquaintances getting as much as 5,000 shares. A source confirmed to internetnews.com that "the morale at China.com is really low because few of the rank-and-file employees are benefiting financially from the IPO." A day before the share offering, China.com's Director of Web Publishing, Cheung Fai, walked out of the company, indicated sources. However, some employees did receive stock option plans. According to another source, at least 50 employees in the company of 300 were offered stock option plans at the generous price of $13.50 per share, discounted from the initial offering of $20. After the first year, a quarter of the shares vests every year. But the insider said that the quantity of the stock, in most cases, was limited to 500 shares, an amount that some employees feel is too small to be of value. "The problem wasn't in the value but in the quantity of stock given. At the end of the day, its quantity that matters," added the source. The inside source commented that in a company that does not pay 13 month salaries, as is customary in established Hong Kong companies, this stock plan didn't give much incentive to employees to stay. Nevertheless, 500 shares at Wednesday's closing price of $45.63 are worth a total of US$22,815, nothing to frown at. Of course, this can only be good news if the value of CCC shares are maintained or improved up to the time that they vest. According to analysts Capital Research Group Inc., shares of China.com will have a support level of $45 dollars and will then experience a "steady upward trend." Industry observers say that, before listing, CCC and its 'sister company' China Internet Corp. (CCC) were already known for having a significant turnover of employees, some say as high as 60 percent annually. One employment consultant joked that CCC was a good 6 month teething ground for IT professionals in Hong Kong. CCC officials were unavailable for comment.