Beltway Biz

When the Chips Are Down

By Bob Starzynski

Two Virginia companies offer contrasting strategies in response to their plummeting stock prices.

Treev Inc., a Herndon-based maker of document management software, was forced to take action on its poor stock price by the Nasdaq Stock Market last month. The stock, which has traded below $1 a share for more than half of the past year, is not in compliance with Nasdaq regulations that require a minimum bid of $1 for stocks listed on its National Market.

Nasdaq's order: Get the price over the threshold for 10 consecutive days before Oct. 7 or be delisted.

Since the company has not been able to get the price up, it announced Sept. 17 it would request a hearing with Nasdaq to stall the delisting. Meanwhile, the company has been moving to gather shareholder approval for a reverse stock split. A reverse split would double the price of the stock but would cut the number of shares outstanding in half.

What's more, the company admitted in a public statement Sept. 17 that the reverse split, if implemented, would not guarantee a continued compliance with Nasdaq rules. The stock could keep dropping even after the split.

Template Software Inc., an integration software business in Dulles, is suffering from a problem that is not quite as drastic but is still disappointing.

Public since the first quarter of 1997, Template has been on a long, slow slide for the past year, from almost $20 a share to less than $4 in early September. Although Template is not at risk of being delisted by Nasdaq, the company has not given investors much to cheer about.

To boost investor confidence in its stock, Template is putting its money where its mouth is. On Sept. 18, the board of directors authorized the company to buy back 500,000 shares, or roughly 10 percent of the outstanding stock.

The move has not gotten Template investors very jazzed. The stock has hovered around $4 since the announcement.

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