From today's Wall Street Journal Interactive Edition.
E.Digital Down 13%; Co. Cites Volatile Mkt, Lack Of News
Dow Jones Newswires
By Dinah Wisenberg Brin
PHILADELPHIA -- Shares of e.Digital Corp. (EDIG), which develops technology for hand-held music players and other portable electronic devices, slid as much as 29% Thursday, movement the company attributed to overall market volatility and investors' eagerness for certain company-related news.
The over-the-counter San Diego company, which last month applied for listing on the Nasdaq Stock Market, has developed a next-generation technology for transferring music from the Internet to hand-held players.
Investors are awaiting word on the Nasdaq listing and announcements from record labels related to the Internet music technology, e.Digital Senior Vice President Robert Putnam said. Besides that eagerness for news, Putnam attributed the stock slide to the overall volatility in a market where technology shares have tumbled in recent days.
"I think we've always been a pretty volatile trader and I think it's been a volatile week," he told Dow Jones Newswires. E.Digital is looking to move to Nasdaq so it can reach less volatile investors such as institutions and mutual funds, he said.
"I think lack of news is obviously a major reason" for the dip, he added. Technology stocks are having a rough time of it this week unless they issue a major announcement, he said.
After falling as low as 7 1/2, the stock recently traded at 9 3/8, down 1 5/32, or 11%, on volume of 4.1 million shares. E.Digital closed down 14% on Wednesday.
By Dinah Wisenberg Brin
PHILADELPHIA (Dow Jones)--Shares of e.Digital Corp. (EDIG), which develops technology for hand-held music players and other portable electronic devices, slid as much as 29% Thursday, movement the company attributed to overall market volatility and investors' eagerness for certain company-related news.
The over-the-counter San Diego company, which last month applied for listing on the Nasdaq Stock Market, has developed a next-generation technology for transferring music from the Internet to hand-held players.
Investors are awaiting word on the Nasdaq listing and announcements from record labels related to the Internet music technology, e.Digital Senior Vice President Robert Putnam said. Besides that eagerness for news, Putnam attributed the stock slide to the overall volatility in a market where technology shares have tumbled in recent days.
"I think we've always been a pretty volatile trader and I think it's been a volatile week," he told Dow Jones Newswires. E.Digital is looking to move to Nasdaq so it can reach less volatile investors such as institutions and mutual funds, he said.
"I think lack of news is obviously a major reason" for the dip, he added. Technology stocks are having a rough time of it this week unless they issue a major announcement, he said.
After falling as low as 7 1/2, the stock recently traded at 9 3/8, down 1 5/32, or 11%, on volume of 4.1 million shares. E.Digital closed down 14% on Wednesday.
This week's slide comes in a 52-week period in which e.Digital shares rose from a low of 1/8 on April 6 to a high of 24 1/2 on Jan. 24. The surge earlier this year came after e.Digital unveiled its portable Internet music player at a trade show.
E.Digital's Putnam said the company will be in a good position to win business for that music player when record companies start making music available for downloading on the Internet. The company says its technology addresses the music industry's concerns over piracy.
EMI Music, part of EMI Group PLC (U.EMI), and Universal Music Group (X.UMG) have both indicated they'll start online distribution sometime this spring, Putnam said. Original equipment manufacturers, or OEMs - the companies that make the hand-held music players and which constitute e.Digital's market - are waiting to find out exactly when distribution will begin, and which standards the companies will use, he said.
E.Digital's patented technology can be adapted to any standard chosen, Putnam said. "We're in a great position," he said. "We positioned our company to support desirable content as soon as its available."
E.Digital's president and chief executive, Alfred Falk, discussed the music player, the Nasdaq listing and other issues in a letter to investors on Tuesday.
"Our business model is to license our patented and proprietary technology to OEMs for use in branded products which they will market and distribute to the retail consumer. These licensing agreements provide e.Digital licensing fees and/or royalty fees on each unit," Falk wrote.
"Knowing that the top five record labels most likely will not agree to a single (technology), our engineers developed a design that is highly flexible and field upgradeable," Falk said. The company is working with the five labels to assure that its player design will be able to play "prime content" when it becomes available online, he added.
The record industry's forthcoming online distribution of music will use technology that goes beyond the current MP3, Putnam said.
Falk also noted the company has been assigned a Nasdaq listing officer with whom it is exchanging information as part of the process, which could take several weeks to a few months to complete.
On Monday, the company reported to the U.S. Securities and Exchange Commission that Putnam, Falk and another officer had sold more than 470,000 of their e.Digital shares combined, a substantial portion of their holdings.
Putnam told Dow Jones, however, that the three officers are net buyers of the company's stock, and that the sales were connected to the exercise of options and covering tax bills associated with that exercise.
Besides music players, E.Digital develops technology for portable voice, audio, still-image, video and data devices that can connect to personal computers and the Internet.
- Dinah Wisenberg Brin; Dow Jones Newswires; 215-656-8285 |
