Bill Simpson wrote an analysis of VeriChip (NasdaqGM: CHIP). The IPO began trading on Feb. 9, and the stock opened and closed at a share price of $6.50, from a range of $6.50 to $8.50. The underwriters also cut the size of VeriChip's IPO to 3.1 million shares from 4.3 million shares.
The text of Mr. Simpson's original writeup follows:
VeriChip plans on offering 4.95 million shares at a range of $6.50 - $8.50. Merriman Curhan Ford is lead managing the deal, Kaufman and CE Unterberg are co-managing. As far as I can tell, Merriman as currently structured has not led an offering previously. Post-offering CHIP will have 11 million shares outstanding for a market cap of $82.5 million on a $7 1/2 pricing. IPO proceeds will be used by CHIP to market their VeriMed system as well as for general corporate purposes.
Applied Digital Solutions (NasdaqCM: ADSX) will own a little over 50% of CHIP's outstanding shares post-ipo. CHIP Chairman of the Board and CEO, Scott R. Silverman was CEO of ADSX from 3/03 - 12/06. He resigned that position in order to take the CEO position with CHIP. Note that Mr. Silverman received a substantial pay package in 2006 as part of this switch. Total 2006 compensation for Mr. Silverman was approximately $4.7 million. ADSX 2006 revenues were a little under $30 million. Yes, approximately $3.5 million of this compensation was part of a deal in which Mr. Silverman waived certain accrued incentives/options with ADSX. Still this was quite a nice payout for the CEO of such a small operation as CHIP. Note also, that Mr. Silverman has a $100,000+ annual expense allowance as CEO of CHIP. This is over/above his salary, bonus and stock awards.
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