AMPD<---isnt dumb enough to go through with CNBC inteview, if they do they will get shredded like confetti!
BN Amplidyne's CEO Surprised at Stock's Rise After Announcement
Sep 13 1999 8:21
Amplidyne's CEO Surprised at Stock's Rise After Announcement
Raritan, New Jersey, Sept. 13 (Bloomberg) -- Amplidyne
Inc.'s chief executive said he's surprised shares of the
telecommunications equipment maker soared as much as five-fold
late last week after the company announced its first products for
high-speed wireless Internet access.
``I didn't expect this reaction at all,' Devendar Bains
said in an interview.
The Raritan, New Jersey, company surged as much as 13 5/8 to
16 3/4, a record, Thursday and Friday as 38.2 million shares
traded. The stock fell 2 5/16 to 9 15/16 in early trading today.
Bains, who owned 3.24 million shares as of March 31, said
the stock's price is still ``too low.' Amplidyne first sold
shares to the public at $5 each in January 1997.
``We have probably the world's best product,' he said.
Amplidyne said its high-speed access device provides
Internet service that's 36 times faster than a 56k telephone dial-
up modem. Users must place special antennas on their rooftops
that would be connected to Amplidyne's equipment.
Bains said the company isn't ready to show the new product
to potential customers. ``It's probably not the right thing to
do,' he said. ``We have to make sure everything is right before
we demonstrate it.'
He said the product line, to be manufactured in Asia, won't
be rolled out for 60 to 90 days. He declined to discuss pricing.
Young Design Inc., a competitor in Falls Church, Virginia,
announced a similar product almost a year ago.
``If you look at their press release, they're not describing
anything that hasn't been out there on the market for at least a
year,' said Rob Fitzgerald, chief executive of YDI, a private
company.
Similar Language
Last Oct. 19, YDI announced a high-speed wireless Internet
access system that, like Amplidyne's, offers Internet access at
speeds up to 2,000 kilobits per second. Amplidyne's press release
uses language similar to YDI's.
``This will enable all computers on that network to have
continuous high-speed wireless Internet access at a fraction of
the cost of having wired Internet service,' said both press
releases.
Bains said the similarity to YDI's release was probably a coincidence. He said he was familiar with the company and had
even tried to buy it. ``We've looked at their product,' he said.
``I'm under a non-disclosure agreement. We were trying to acquire
that company.'
YDI's Fitzgerald wouldn't say if he's had talks with
Amplidyne. ``We have no desire to sell out,' he said. ``We think
we're very well-positioned.'
Bains said Amplidyne's high-speed wireless Internet access
system was developed by staff engineers and consultants over the
past nine months at a cost of more than $1 million.
Less Spending
According to Amplidyne filings with the Securities and
Exchange Commission, spending for research and development
declined 5 percent to $135,702 in the second quarter. The company
spent $811,612 on research and development for 1998 and the first
half of 1999 combined, the filings show.
After last week's price surge, Amplidyne's 5.8 million
shares outstanding were worth $71 million. That's about 10 times
more than its shareholders would have received when it agreed to
be acquired late last year.
In December, it signed a letter of intent to be bought by Microwave Power Devices Inc. of Hauppague, New York, for $7.2
million in stock. On Jan. 21, the transaction was canceled
without explanation.
Four days later, on Jan. 25, Amplidyne said it had received
a $5.4 million order for telecommunications amplifiers. The
company said then that the order -- triple 1998's total sales of
$1.79 million -- would begin shipping immediately and be
completed by year's end.
Bains said in the interview just $1 million of the order was
shipped before the Korean customer changed its specifications. He
said shipping won't resume before the fourth quarter.
``It may extend into 2000, 2001,' he said. The company's
total sales for the first half of 1999 were $1.1 million.
Cash Strapped
Amplidyne, which has lost $12.3 million since it was founded
in 1988, has been strapped for cash since soon after its IPO.
The company has sold stock at below-market prices to raise
funds. In April, it sold 900,000 shares in a private placement at
1 1/8, 57 percent below the prevailing market price. In June, it
sold $500,000 of preferred stock convertible into common shares
at a 15 percent discount to their average closing price for the
five days prior to conversion.
To conserve cash, Amplidyne's officers have deferred their
salaries or been paid in stock since 1997. In July, Amplidyne
moved out of its 21,000-square-foot headquarters in Somerset, New
Jersey, to an 11,400-square-foot site in Raritan. Its monthly
rent fell from $14,000 to $5,937.
William Suter, an electrical engineer, was in charge of
designing and developing Amplidyne's products when it raised
$6.78 million in its 1997 initial public offering. He quit 10
months later.
``They got quite a bit of money in the IPO and just
frittered it away,' said Suter in an interview.
Suter said Amplidyne's prospectus falsely claimed the
company's computers were connected on a network. Bains didn't
challenge that.
``I think we intended to' connect them, he said. ``If it
got put in the prospectus and we didn't do it, I apologize.'
When asked about Suter's departure, Bains said he left on
his own accord. ``I'm sure he was competent,' he said.
--David Evans in Los Angeles (310) 827-2348 through the New York
newsroom (212) 318-2300 jh |
