Shares in upstart cybersecurity company MGT Capital Investments (MGT) leapt in extended trading Thursday after the company asked the Securities & Exchange Commission to rescind a 2015 request to register new shares that predated its current efforts to nearly double its share capital.
The stock closed 7.48% higher in extended trading at $3.45 as investors applauded MGT's efforts to remove additional opportunities to dilute the number of shares issued.
In a Thursday filing, MGT said the registration should be cancelled since it never availed itself of the registration, which was filed Sept. 24, 2015. It asked that the money it paid for the registration be credited toward future SEC interactions.
MGT shareholders will vote on Sept. 8 about the company's ambitious plans to buy two cybersecurity businesses, including the D-Vasive activities of virus pioneer John McAfee. The plans include renaming the company John McAfee Global Technologies and issuing 43.8 million new shares to cover the purchases.
The company currently has 23.86 million shares, according to its website.
Investors are also being asked to approve an increase in approved capital to 250 million new shares from current approved capital of 75 million shares. The shares could be used for additional acquisitions, but large blocks of shares can only be issued with further shareholder approval.
MGT in August also released second-quarter earnings that showed it had no revenue in the second quarter compared to sales of $14,000 in the second quarter of 2015. That left it with a 29 cent per-share loss in the period.
Once a gambling and patent lawsuit endeavor, MGT soared out of obscurity in May when it unveiled the acquisition of McAfee's business and made the 70-year-old McAfee its CEO. The executive was the founder of his namesake anti-virus company, which was purchased by Intel (INTC) - Get Report in 2001.
The shares then rocketed from a 52-week low of 15 cents to as high as $5.58 as investors hoped the eccentric McAfee could breathe some life into the company.
The employment agreement with McAfee includes bonuses if MGT shares stay above $2 and $3 for specific periods. The executive remained in the headlines this summer with a failed bid to become the Libertarian presidential nominee.
He also caused a stir in cybersecurity circles last month when he tussled with quirky German hacker and megaupload founder Kim Dotcom on Twitter. Dotcom accused McAfee of trying to get a piece of his latest filesharing venture in exchange for MGT shares, which Dotcom said was an effort to boost MGT stock.
"They offered $500k for a no-substance partnership announcement with the sole purpose to pump up MGT stock," Dotcom wrote.
Dotcom lives in New Zealand and is fighting extradition to the U.S. on charges of copyright infringement, racketeering and money laundering. The extradition hearing, expected to last six weeks, is being live-streamed from an Auckland courtroom.
MGT didn't respond to an email request for comment.