Re: 9/25/06 - [PGWC] Pegasus PR: Pegasus Wireless to Move from Nasdaq; Forbes: Pegasus Is De-Listing
Pegasus Wireless to Move from Nasdaq
Monday September 25, 7:39 pm ET
Company Will Continue to Comply With All SEC Reporting Obligations
FREMONT, Calif.--(BUSINESS WIRE)--Pegasus Wireless Corp. (Nasdaq:PGWC - News), a leading provider of advanced wireless solutions, today announced that it has applied to withdraw its securities from listing on the Nasdaq Global Market by October 26, 2006, at which time the Company expects Pegasus Wireless stock to immediately begin trading on another listed exchange or the OTC Bulletin Board.
In a letter to Nasdaq the Company said, "Over the preceding two months, the common stock of PGWC has experienced significant volume increases, price reductions and volatility. PGWC believes that it is in its shareholders' best interest" to take this action.
The Company noted that it is in compliance with all the Nasdaq Global Market listing requirements.
Commenting on the decision, Pegasus Wireless CEO Jasper Knabb stated, "Taking into consideration current market environments and trading patterns over the last six months, the Board has determined that maintaining the listing of Pegasus Wireless' common stock on Nasdaq no longer serves the best interests of the Company and its stockholders."
The Company said that it will continue to comply with its obligations under the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, including filing annual reports on Form 10-KSB and quarterly reports on Form 10-QSB. The Company said that it also intends to maintain internal control and governance procedures in line with the Sarbanes-Oxley Act of 2002.
"The Board of Directors considers it critical to maintain a viable market for the Company's common stock. For this reason we are working to ensure a smooth transition to another listed exchange or the OTC Bulletin Board. Moreover, we believe that by withdrawing from Nasdaq the Company will be able to expend more of its time and resources on growing the Company and manufacturing and marketing wireless products which in turn will be more beneficial to our shareholders," Mr. Knabb concluded.
About Pegasus Wireless Corp.
Pegasus Wireless Corp. is a leading provider of advanced wireless solutions. Pegasus creates hardware and software solutions for broadband wireless networking and Internet access applications through its manufacturing facilities located in China and Taiwan. Pegasus' patented 802.11 technology is the platform for Wi-Fi technology, and the company offers cutting edge wireless products used in computer networking, industrial data transmission, and multimedia applications. Pegasus pioneered the industry's first driver-less, truly plug-and-play wireless Ethernet bridge, and the company's wireless networking products allow a higher user capacity per base station as compared to the competition. These products also offer advanced security, easy true plug-n-play installation, dynamic load balance, non-interrupting real-time roaming connectivity, e.g. VOIP, and fail-safe, self-healing mesh networking capability. Products are distributed through the company's facility located in California. Pegasus Wireless Corp. can be contacted at 510-490-8288 or by visiting their website at pegasuswirelesscorp.com.
Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. These forward-looking statements, which include, without limitation, the Company's expectation that its securities will trade on another listed exchange or on the OTC Bulletin Board and the Company's intent to comply with certain provisions of the Sarbanes-Oxley Act of 2002, involve known and unknown risks, uncertainties and other factors. Such uncertainties and risks include, among others, success in reaching target markets for services and products in a highly competitive wireless technology market, the ability to maintain existing and attract future customers; the ability to finance and sustain operations, including the ability to comply with the terms of working capital facilities and/or other term indebtedness of the Company, and to extend such obligations when they become due, or to replace them with alternative financing; the ability to raise equity capital in the future; the ability to achieve and sustain profitability; the ability to maintain business relationships with product vendors and service providers; the ability to retain a skilled professional staff and certain key executives; and such other risks and uncertainties included in the Company's Annual Report on Form 10-KSB and other filings with the Securities and Exchange Commission. The Company has no obligation to publicly release the results of any revisions, which may be made to any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after the date of such statements.
Contact:
Sitrick And Company
Mark Saylor or Maya Pogoda, 310-788-2850
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Source: Pegasus Wireless Corp.
biz.yahoo.com
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Financial Services
Pegasus Is De-Listing
Liz Moyer, 09.25.06, 10:45 PM ET
Jasper Knabb and his streaming video technology is about to beat Steve Jobs to the punch.
But before that, the chief executive of Pegasus Wireless (nasdaq: PGWC - news - people ), a Freemont, Calif., wireless equipment maker, has to contend with forces that have hammered down the company’s stock by more than 90% since May in an aggressive and seemingly relentless bear raid.
Late Monday, Pegasus announced it was applying voluntarily to de-list its stock from the Nasdaq national market, with plans to move to another national market or the over-the-counter market by the end of October.
The move comes after an attack of short selling that began shortly after the company’s Nasdaq listing in April and accelerated through the summer. Right now, shares of Pegasus are trading around $1.07, down from $18.60 in mid-May. This comes despite positive earnings in June and the announcement that the company would soon unveil patent-pending wireless video streaming technology for consumer use.
The technology that Knabb is scheduled to unveil days from now, he says, will beat Apple Computer (nasdaq: AAPL - news - people ) to market by several months.
Pegasus' patent-pending device allows consumers to wirelessly stream DVD-quality video content from the Internet in real-time to a TV elsewhere in their house. Last week, Jobs, Apple's chief executive, announced that his company would be ready to unveil similar technology for home use early next year.
Meanwhile, Pegasus shares are under constant attack. What’s striking about the activity affecting the company’s stock are the concurrent volume spikes in trading, the build-up of short interest from almost nothing to about half the available float, and the sharp decline in the price. All of this has occurred in the last three months.
Pegasus said in a statement that that it is in compliance with all the Nasdaq Global Market listing requirements. Knabb said, explaining the move, “Taking into consideration current market environments and trading patterns over the last six months, the board has determined that maintaining the listing of Pegasus Wireless’ common stock on Nasdaq no longer serves the best interests of the company and its stockholders.”
Spokespersons for Nasdaq were not immediately available Monday night.
The steepest declines in Pegasus shares have come in the last month, after a series of negative news articles taking Knabb to task for his background and his prior business associations.
The stock's decline also coincides with the publication of 11 negative research notes from July through August by well-known short-seller Manuel Asensio, who runs his own research firm, Asensio & Co.
An e-mail message to Asensio’s firm earlier on Monday was not answered.
Pegasus shares are down 86% since Aug. 23. That's bad news not just for Knabb, who has sunk some $16.5 million of his own money into the company and given up a salary and cash bonus in favor of stock grants. Institutional holders as of June 30 included Barclays Global (nyse: BCS - news - people ), Goldman Sachs (nyse: GS - news - people ), Deutsche Bank (nyse: DB - news - people ), Vanguard, Mellon Financial (nyse: MEL - news - people ), and the Ohio Public Employees Retirement System.
Knabb invited criticism when he announced in early August that he would pay a warrant to shareholders as a way of saying thanks to those who had stuck around while the price dropped during the early summer.
From the May 5 peak of $18.60 a share, the price had dropped some 67% by the time he announced the warrant offer on Aug. 4.
But the warrant would only be paid to registered shareholders. That meant brokerages holding the shares for clients in "street name" would have to submit lists to Pegasus' transfer agent to match up their clients with the shares they had on record. The warrant was not transferable, meaning it would only be paid to beneficial shareholders, not to the brokerages to distribute to clients.
Some accused Knabb of trying to manipulate his stock by structuring the warrant offer this way. It had the effect of forcing anyone who lent the stock out to call it back in, forcing shorts to cover their positions. Such a quick buy-in--the deadline was originally Aug. 11--can push the shares up as the shorts scramble for shares to cover.
Knabb has denied any such intent to force his stock higher.
In trying to sort out the information coming to Pegasus’ transfer agent from brokers and information on the company’s stock held at the Depository Trust & Clearing Corp., it became clear that there was a problem. Brokers are reporting more shares--3 million to 22 million, depending on what data is examined--than exist.
Such share discrepancies can result from innocent errors or from something more: naked short sales of Pegasus stock, meaning a short-seller has not properly gotten dibs on shares to borrow before selling. Naked short-selling can result in the same share being lent to more than one trader, creating phantom share entitlements.
In simple supply and demand economics, artificially increasing supply will push down the price of even the strongest of shares.
By mid-August, it was becoming increasingly obvious that traders were betting heavily on a decline in Pegasus. Short interest reported by Nasdaq rose to 8.3 million in August from 5.1 million in July. It was 8.3 million for September. The Nasdaq reports short interest on the fifth or six of the month.
Volume on Pegasus soared from basically nothing at the beginning of 2006 to more than 1 million trades a day. On Sept. 5, more than 17 million shares traded hands. Pegasus has a free float of about 16 million shares.
On Aug. 17, Pegasus also joined a list of Nasdaq stocks that have the most trade settlement failures. It has stayed there since.
forbes.com |
