Sycamore shares tumble as company seeks approval for liquidation
(Reuters) - Shares of communications equipment provider Sycamore Networks Inc SCMR.O plunged after it said on Thursday that it would seek shareholder approval for a previously announced sale of its bandwidth management assets and a dissolution of the company.
Shares of the company, which went public in 1999, fell 26 percent to an all-time low of $2.65 on the Nasdaq on Friday. The shares had touched a high of $1,995 in 2000 at the height of the dotcom boom.
Sycamore said in a filing that the maximum amount available for distribution to shareholders will be about $2.60 per share on authorization of a sale. (link.reuters.com/gyw93t)
The company has been struggling with falling sales of its bandwidth management products, its only source of revenue.
"The number of opportunities for bandwidth management products worldwide has become limited. Competition for these opportunities is intense and includes considerable pricing pressure," the company said in its 2011 annual regulatory filing.
Sycamore was not available for comment. A call to Robert Travis, director of investor relations, went to a voicemail that said the company is seeking shareholder approval to dissolve.
The company, whose customers include Verizon Communications (VZ.N) and Sprint Nextel (S.N), said last month it had signed an agreement to sell its bandwidth management assets to a subsidiary of Marlin Equity Partners for $18.8 million, and would wind down its remaining operations.
(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Sriraj Kalluvila)