Corvis moving to Nasdaq small-cap list

Columbia company's stock remains below $1

October 02, 2002|By Stacey Hirsh | Stacey Hirsh,SUN STAFF

With its shares trading below $1, Corvis Corp. said yesterday that its stock listing would move from the Nasdaq national market to the Nasdaq small-cap market.

The Columbia-based maker of fiber-optic equipment said the change will be effective Oct. 14 and will give the company time to regain its Nasdaq national market listing. Corvis said its stock could be moved back to the Nasdaq national market if it trades at or above $1 for 30 or more consecutive trading days.

Under Nasdaq rules, companies have 180 days - or 360 if they meet certain financial requirements - to achieve that.

"We looked at the options that we had and, basically, we think this is the best option for our shareholders," said Andrew Backman, Corvis' vice president of investor relations and public relations.

The company will continue to trade under the ticker symbol CORV. Shares closed yesterday down 2 cents at 55 cents.

Analysts have said that Corvis, which has five customers, needs more clients and that its technology is too far ahead of its time because it is all optical. Other fiber-optic technologies use light and electronic signals.

The move to the small-cap market is likely to divert the attention of analysts and institutional investors from Corvis, analysts said yesterday.

"It basically puts them off the radar screen. You're not going to see analysts following Corvis actively," said Alex Mou, a senior analyst who follows telecommunications companies at Hotovec, Pomeranz & Co. in San Francisco.

Mou expects to see more telecommunications stocks follow Corvis' route to the Nasdaq small-cap market. "There are a decent number of companies ... [that] are penny stocks right now," he said.

To have its stock traded on the small-cap market, a company must pay an annual fee and meet certain financial requirements.

Backman said the company's announcement stems from an industrywide problem. Shares on the Nasdaq small-cap market trade on the same electronic system as the national market, so trades can be made just as quickly, and Corvis' move will be transparent to shareholders, he said.

"What this move does is give us additional time and flexibility to meet the requirements of the Nasdaq national market," Backman said.

Analyst David Gross of Communications Industry Researchers said he sees no significant changes for the company.

"The way I look at Corvis now is that they're a well-funded startup with over half a billion dollars in the bank, and they're starting over again," he said.

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