eConnect - the First Stock to Return to the OTCBB After SEC Halt
By Giando Argentina
Published by OTCNN.com
11/02/2000 10:10 AM EST
In a previous article I had pointed out that out of the ten SEC imposed trading halts on OTCBB stocks, none had managed to come back from the “Pink Sheets”. As of November 1, 2000 eConnect (OTCBB:ECNC), had the honor of being the first stock to come back to the OTCBB after being halted by the SEC.
March 13, 2000, eConnect was halted by the SEC, because: “the Commission temporarily suspended trading in the securities of eConnect because of questions that have been raised about the adequacy and accuracy of publicly disseminated information concerning, among other things, a purported license arrangement regarding PalmTM organizers, a purported strategic alliance with a brokerage firm to distribute one of eConnect's products, and the amount of revenue reportedly generated by one of eConnect's Web sites”.
eConnect eventually settled the complaint without admitting fault and by agreeing not to commit fraud in the future. As of yesterday, eConnect had one market maker quoting the stock, J. Alexander Securities. Shares of ECNC catapulted from a low of 25 cents on Wednesday to an intra day high of $2.125 a share, and closing Thursday at $1.35. Definitely a great two-day return, but still a ways off from the approximate price of $10 per share when it was halted back in March.
The company issued several press releases in the last couple of days including “eConnect has reached an agreement in principle with lead class counsel for plaintiffs regarding settlement of the consolidated shareholder litigation. This litigation followed the company's delisting from the OTC BB last March, as the Securities and Exchange Commission temporarily halted trading in ECNC shares.” It also plans to issue increase its authorized shares by fifty percent, from 200 million to 300 million because ”the issue of additional stock would finance future steps in eConnect's business plan, including its pending acquisition of NDFC, the Chico, Calif.-based affiliate that will process Bank Eyes Only™ transactions, and will help distribute initial eCashPad shipments. The deadline for that acquisition has again been extended, to January 2, 2001, said R. Scott Hatfield, NDFC's executive vice president.”
Also of interest is the fact that eConnect plans to file for NASDAQ NM or AMEX listing as soon as the company shares are quoted again on the OTCBB. NASDAQ NM listing requirements are a bit more stringent that the requirements to quote on the OTCBB. We will have to wait and see how that plan works out.
With the company shares trading on the OTCBB again an article by David Evans from Bloomberg, cast some doubt on eConnect and the references to Sun Microsystems in eConnect’s press releases. From the Bloomberg article: “Sun Microsystems spokesman Larry Lettieri said the press releases violated company policy because they weren't first cleared with Sun's public relations department. eConnect spokesman Fred Biddle said, ‘‘there is no formal business relationship'' between the two companies.
Now all eyes will be on eConnect, the first company this year to be able to obtain quotation on the OTCBB after an SEC imposed trading halt and subsequent quotation on the “Pink Sheets.” Considering the reasons the SEC suspended trading back in March 2000, investors should pay close attention to these and future press releases.
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