What happened to

Odetics

(ODETA)

?

A few weeks ago, Odetics' stock chart was as cheery as a scene like those just across its parking lot at

Disneyland

. The small Anaheim, Calif.-based high-tech incubator spun a wonderful tale: With the impending initial public offering of its

Iteris

division, a few more burgeoning Internet companies growing under its wings and a healthy balance sheet, it seemed that Odetics and its shareholders would live happily ever after. After two columns in this space telling that story (the

first on Feb. 22), the stock reached for the heavens, jumping to 26 1/8 from 19, a 38% increase in the course of three days.

But then came the bite of the poison apple.

On March 22, the company postponed the Iteris IPO, and Odetics' stock dropped even harder than it had risen. Within a week of the delay, the stock had dropped to 13 5/8, 54% off its recent high set March 3.

In hindsight, there were warning signs that the deal was in trouble: The IPO initially was delayed by two days on March 20 and the price, set at a range of 11 to 13 per share, was lowered the day before it was yanked off the calendar. But that kind of Monday morning quarterbacking doesn't help shareholders now.

Keeping Mum

Odetics had little to say about the delay. A company press release blamed "market volatility." And since the deal was only postponed indefinitely, not cancelled, the company is still in its quiet period, as mandated by the

Securities and Exchange Commission

. An apologetic Odetics CEO Joel Slutsky told

TheStreet.com

: "We're still in registration so there's nothing I can say. We're exploring everything, I just can't ... well, I can't say, well, zippo."

It seems that the fund-manager set ultimately had little interest in the deal, despite

DaimlerChrysler's

(DCX)

backing (it had acquired 2.5% for $3.75 million). There was a whole host of money managers and individuals who would've been willing to flip the stock -- that is, buy and then immediately sell it -- for a quick buck. But the long-term shareholders a company needs just weren't there, according to one person familiar with the deal. (The deal, which involved 4.3 million shares, was to be led by underwriter

Bear Stearns

(BSC)

.)

Iteris makes high-tech safety products for autos. It's a successful start-up business, with $21.6 million in 1999 revenue. Problem is, auto parts is a buzzword-free business -- it's not Internet, it's not B2B, it's not biotech. More pointedly, it's not hot.

So now Odetics is the stock that needs help.

"With the Iteris IPO shelved, there's no near-term catalyst for shares of Odetics," says William Gibson, an independent analyst who once covered the company for

Cruttendon Roth

(now

Roth Capital Partners

). "I think a lot of people got into the stock so they could get the IPO shares. Once that's out of the picture, they don't want the stock."

Oxymoron

The context here is that Odetics briefly entered the rare air of highflying tech stocks. It became, ever so briefly, a momentum stock. The problem is that "momentum investor" is an oxymoron. With the departure of an Iteris IPO, short-term interest left Odetics -- and there's no other interest to support the stock. Investors realize that in the short term Iteris is the only company that Odetics is close to spinning off. The incubator strategy isn't a quick one, and the possible spinoffs of Odetics' broadcasting unit, or the

Mariner

broadcasting unit, are going to take a while.

Yet Odetics has plenty of cash to continue to run Iteris internally. And even without the Iteris IPO, Odetics holds assets worth $73 million, with better than $60 million in revenue expected this year. But the value of the company has dropped to just $184 million from $268.5 million.

So for now, Odetics is a value play -- but of course all the fast money wants is a stock with momentum. If the company were valued as a sum of its parts, it would suggest a much higher stock price. Along with Iteris, Mariner and broadcasting unit, Odetics also has some real estate, income from a lawsuit and few million in cash.

"I don't think pulling the deal was a bad move for the company," says Howard Love Jr. of

Love Capital Management

, a longtime Odetics shareholder. "I know Joel well, and he's the kind of guy who wouldn't do a deal if he didn't think the time was right. He's the kind of guy who'd say, 'Hey, if it's not ready, we'll do it later.' He's not time-crazed, he's much more old fashioned. If the value isn't there now, he'll wait. I think you have to take a long-term view with this stock."

Indeed, but it's clear that in this market few investors are willing to do that.

Cory Johnson files weekly from TheStreet.com's San Francisco Bureau. In keeping with TSC's editorial policy, he neither owns nor shorts individual stocks, although he owns shares of TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Johnson welcomes your feedback at

cjohnson@thestreet.com.

For more columns by Cory Johnson, visit his column

archive.