Here’s an amusing bit of speculation: why not take over Genuity (GENUQ.OB)? Sure, the company’s in bankruptcy and in such bad shape that the homepage doesn’t even load, but the market cap, at today’s closing of eight cents per share (up one!), is only $912,000.
Seriously, this was a once great company called Bolt, Beranek, and Newman which was a key developer of ARPANet. Which we all know was the predecessor to our wonderful and shiny Internet/WWW. The company got swallowed up in a series of acquisitions, though, and only became free again a couple of years ago when GTE and Bell Atlantic were merging to form Verizon; the government, as a condition of approving the deal, required a spinoff.
I became interested at this point because the brokerage firm I use was managing the IPO. My broker knew I’d been interested in hot offerings in those long-ago pre-Crash days and offered me a couple of hundred shares at $11. Why not, how could I do worse than triple my money? Ah, the good old days of greed backed up by money surging in and pumping the market to astronomical places! Of course, GENU, as we called it then, never actually rose above the offering price and quickly headed down. Down. DOWN.
Soon the stock was trading in a $3-4 range. The excitement I felt when it temporarily surged above $5! But it was not to be. Rumors of a spin-in to Verizon vanished in the cruel aftermath of a canceled service contract and the stock slunk lower and lower and Lower and LOWER! Fear not, because the mighty financial wizards have the answer, a reverse stock split. Give in 20 shares and get back one, but this way the stock can remain listed on NASDAQ, the exchange with silly rules about $1 per share minimums and such. Since the price was ten cents on the day of the split, that pushed us all the way back to $2, at least for a day or so. Then the long decline resumed and the stock fell to 40 cents.
Which is when my broker called and asked if I’d like to sell. Plus it was the end of the year, she’s thinking I could use the tax loss. Um, but I didn’t need it, couldn’t use it, and I would have had to pay the brokerage $1 (net) for the transaction fee. I mean, my $2200 investment had fallen to $4! Fallen. FALLEN! Thanks but no thanks, I said. Finally the genius Genuity management realized there was nothing left and they’d better grab the best deal another set of whizzes on Wall street could figure out. So they sold all the assets to Level 3 and declared bankruptcy. Leaving the stock at, as I mentioned, eight cents.
Now, for some reason unknown to me, 224,000 shares traded today. The average daily volume, according to Yahoo! Finance, is 57,000. So something must be up, but what is it? Will someone come along, find some currently unrecognized gem of an asset that will not only pull GENU out of Chapter 11 but into some new financial heaven, not heaven as in afterlife, but as in some place where my $2200 will rematerialize? Sure. Yeah right. HA HA HA HA HA!!!!
BillSaysThis 