Slashdot Mirror
Silicon Graphics To Be Delisted From NYSE
Dan Linder writes "Starting Monday, November 7th, Silicon Graphics will be delisted from the NYSE. The future of the graphics and supercomputing former-heavyweight has never been less certain. This is especially unfortunate given their ongoing commitment to Linux and other open-source projects." From the article: "The company's stock, which once traded at $50 per share, fell below NYSE's minimum standard for continued listing earlier this year. The move comes as little surprise. The company received a warning from the NYSE in May, when its share price dropped below the $1 barrier. Although it had dipped into sub-$1 territory in late 2001 and again in late 2002, the price on both occasions recovered within a month or two. "
Reverse splits are not done on the NYSE, only on NASDAQ and maybe some other markets outside the US. This goes back to the great crash in 1929, when everyone was doing this, and it caused a lot of confusion about what the stock was worth. Antiquated rule though.
Once they have delisted, yes it will become harder to raise more capital. The bigger issue I think though is that the analysts do not look fondly on a stock that drops off of an exchange. The investing public's opinion will fall drastically and, as a result, the confidence in them will be basically gone. The ability to raise any form of capital (through equity or debt) will be very restricted and there is a likelihood that other companies with receivables out with them will come knocking for their money.
Nope. You can't be under $1.00/share on NASDAQ for more than a month without being delisted.
"I'd rather be a lightning rod than a seismometer." -Ken Kesey
They made the world a better place though, IMHO.
They made the OSS world a better place, at least. SGI is putting lots of resources in OSS software. They gave us things like XFS. Their engineers are part of the group of programmers who made (and are still making right now with patches being merged in each release) possible to make linux scalable in big SMP boxes (ie: their 512-CPU boxes). They gave us things like GLX (the opengl xservers glue)
Linux users owe SGI a lot. They're still not dead though, I hope they find a way to make SGI profitable again...
I have followed SGI's stock and conference calls very closely since 2001.. I have also Extensively used their product since 1993. I've made a lot of money trading the pops in the stock but those days seem over and the risk is too high.
They've had the Same CEO for 7 years. He is also the Chairman of the board. That makes it difficult for the board to remove him. The board should be sued. The executives should be sued. It is sad to watch those assclowns run the company into the ground. Their is no sense of urgency and there never has been.
No executives have been fired. Heads are rolling at Dell because of a single bad quarter. It is like that at most successful companies.. but not SGI..
On October 25, they had their quarterly CON call.. The CEO didn't even mention the impending delisting.. I figure he had to know that it would be announced to the public by the NYSE within days.
The story of SGI is that the best tech doesn't always win (though it is a bit hard to say that with Itanic in the picture).
You missed one of the biggest factors, many mutual funds and institutions (e.g., retirement/pension investors) generally have rules which prohibit them from investing in OTC stocks with low market cap (share price * shares). This is why a reverse split doesn't help, it may increase the share price, but of course reduce the number of shares.
Mutual funds and institutional investors are highly desired as they tend to be stable stock holders which can reduce the volatility of a stock (once they decide to invest they hold large chunks of companies and hold them for a while to increase tax efficiency). Once you get into the open market, you get hedge funds, insiders, and day-traders manipulating your stock price which can cause other investors to flee for the woods.
They also haven't had any analysts covering them since the beginning of this year (nobody likes to cover OTC or penny stocks).
Moving to an OTC (over the counter) market means that there are only a couple brokers making a market in the stock and price reporting is really up to them to perform on a timely basis. This means your broker (unless they are the ones making the market in the stock) really has to try to find a buyer for any stock to you want to sell or will have to pay the market maker a fee and/or be subject to the price they report. In a "listed" stock there generally are several big brokerages that match buyers with sellers and with a big exchange like NYSE enough shares are traded on the floor to create a more continuous range of prices and fast execution of any retail sized trader order. As the price continues to fall, the OTC market maker gives up and demote the stock to the "pink sheets" where sales are reported on paper reports as trades occur. Then the stock isn't very liquid at all and the daily or weekly price report is fairly worthless as an indicator of the worth of the stock.
The long and the short of it is that this means giving stock options to the employees or the executives is really not very meaningful anymore (anytime they sell, they don't have a good idea of the price they will get and more likely they will "heisenberg" the stock because if they sell the price is likely to go down) meaning it's hard to motivate employees and executives with either their existing or any new stock options or grants. Companies like SGI are all about employees, the assets are basically worthless to the investors w/o the employees. Unable to motivate them with stock/ownership, they have to pay them more (e.g. bonuses), or likely suffer attrition.
It's a downward death spiral that almost no company can get out of. For example, SGI has already had to pledge assets (e.g., patents, trademarks, etc.) to get their latest operating loan. In bankrupcy this puts these new lenders in a primary position and the normal equity/stock holders and current bond holders in an inferior position making it less likely for people to invest in the stock (equity holders are the last to get paid back in a bankrupcy). This is what makes it hard to raise any captial, except by heavily mortgaging thier assets even further to the lenders.
Once one of the lenders decides that the company assets are worth more than the company itself it often just rips the company apart for a fire sale to an army of lawyers who snap up patents at fire sales in order to shake down large companies for a few quick bucks. It's a sad, sad day when that happens.
The first time I ever heard about Hypertransport (long before it was available on any motherboards) it was from a friend of mine who works on drivers at AMD. His exact words were "you are going to be happy, the upcoming Nvidia motherboard is going to use the same architecture as your O2."
I asked him "they are putting a crossbar in a PC motherboard?"
He responded "they are calling it hypertransport, but it is the exact same thing. We have been working with them on it, and it is going to be the center of their new Nforce boards."
All press releases aside, AMD was well aware of the SGI crossbar, and Nvidia had the rights to the technology to make it happen on a PC.
As far as the Nvidia cards go, of course they are original designs. I'm not saying they aren't. However, they are original cards being designed by ex-SGI engineers, with access to over a decade of SGI graphics research. Just look at the huge difference between the TNT line of cards (before they acquired SGI's resources) and the Geforce/Quadro line of cards (after they acquired SGI's resources).