Updated from 3:33 p.m. EDT
Shareholders of embattled business-to-businesssoftware maker
approved a 1-for-10 reverse stock splitFriday in a move designed to avoid
In a special meeting Friday morning, shareholdersgave the Pleasanton, Calif.-based company's board theauthority to execute a 1-for-10 reverse stock split,John Biestman, the company's treasurer and vice president of finance, confirmed. The reverse stock split will be effective at the close of business on Sept. 16, the company announced in a press release.
Reverse splits were once considered the lastmilepost before an unceremonious exit, and typically alast-ditch trick by companies trying to forestall acollapse. However, it is a path that more techcompanies, including
, have explored this year as their stock prices plummeted.
In a reverse split, a company consolidates itsshare base, in Commerce One's case giving each holderof 10 existing shares one new one and (hopefully)boosting the share price by something close to anequivalent amount. Although reverse splits aredesigned to boost share prices, investors don't oftenreact positively.
Commerce One received a notice in June that thecompany's stock had failed to maintain the Nasdaq'sminimum bid price closing requirement of $1. Thenotice said that Nasdaq would notify Commerce One ofits intention to delist the stock unless it closed ata minimum bid price of at least $1 for ten consecutivetrading days by Sept. 16.
The company's stock, which soared to more than$100 during the dot-com boom, has not traded above abuck since receiving the notice from Nasdaq. Shares ofCommerce One closed under $1 on May 6 and have stayedthere ever since. Commerce One shares rose 2 cents, or6.4%, to 35 cents in recent trading Friday.
Commerce One has been struggling with dwindlingsales as companies retreated from earlier enthusiasmover e-marketplaces. In the second quarter, whichended June 30, Commerce One reported a net loss of$71.1 million, or 25 cents a share, on $27.8 millionin revenue. That compares to a net loss of $2.1billion, or $9.02 a share, on $101.3 million inrevenue in the year-earlier period, which included a$1.1 billion impairment of intangible assets andequity investments.
Slightly more than one-third of Commerce One'ssecond-quarter revenue -- 35.3% -- came from Germansoftware maker and Commerce One investor
, automobilee-marketplace Covisint and NTT, compared to 20.1% inthe same period a year ago.