January 17, 2001 5:15 PM PST
Netpliance faces delisting from Nasdaq
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Because shares of the Austin, Texas-based company have not been trading above $1 for the past 30 days, the company could be delisted if it cannot get its price above $1 for at least 10 days.
However, the point may be moot. In December, an investor group led by Chief Executive John McHale and representing a majority of the company's shares offered 65 cents per share to buy the company and take it private.
That bid represented a 91 percent premium on Netpliance's closing price the day before the offer but is a figure dramatically below Netpliance's 52-week high of $26.12. Shareholders reacted angrily to the proposal, flooding investor message boards and filing at least two lawsuits.
A Netpliance representative said that there is no update on the takeover bid and that the company has not filed a response to the lawsuits.
In any case, Nasdaq told the company it has until April 17 to improve its share price or face removal.
"Netpliance is considering what action to take to respond to the possible delisting by Nasdaq," Netpliance said in a statement.
Shares closed Wednesday at 56 cents, unchanged from the prior day.
Once delisted, Netpliance could continue to trade as a penny stock on the over-the-counter bulletin board.
Netpliance is widely praised for pioneering the Internet appliance category with its I-opener appliance. However, the company has struggled to find a business model that works. The company had tried selling the unit for as low as $99 and recouping its losses by charging monthly Internet access fees.
In November, the company said it was getting out of the business of selling Internet appliances directly and would instead look to help larger companies manage their networks of Net appliances.
Several tech companies have recently announced possible delistings from Nasdaq, including discount PC maker Emachines.