Trintech shares rose 23 per cent to $2.81 on the Nasdaq market in New York yesterday on their first day of trading following the reverse split or consolidation of the shares to avoid a delisting.
With the price of one Trintech ADR share rebased at $2.28 after their consolidation on a four-for-one basis, the shares improved to $2.81 in early trading.
The shares closed at 57 US cents on Thursday - well off their high of $75 in February 2000. On the German Neuer Markt, the shares closed two cents stronger at 57 cents
Ahead of first-quarter results, due next week, analysts said the rise, which came on trading of about 3,500 ADRs, could have been driven by technical factors such as funds which had to sell when the price fell below $1 buying back in.
Before the consolidation, Trintech's chairman and chief executive, Mr Cyril McGuire, indicated his confidence in the company despite last week's revenue warning by buying shares in the market.
Mr McGuire bought 150,000 shares on the US market, spending $120,000 (€130,222) to $130,000, a company spokesman confirmed. The shares were acquiried in three blocks of 50,000 each at market prices, he said. The purchase increased Mr McGuire's stake in Trintech by 0.3 per cent to 15.5 per cent.
Last week, Trintech shares plunged to record lows, hitting 42 US cents on Nasdaq and 62 cents on the German Neuer Markt when the company disappointed the market with its preliminary statement on its first-quarter 2003 results. It said revenue would be down 35 per cent on the previous quarter, which was already down 11 per cent on the preceding quarter.
Analysts now expect Trintech to announce losses of $4 million to $5 million for the February to April period.
The security software company announced at that time its plans for a four-for-one consolidation to prevent its delisting from the Nasdaq. Because the ADRs had been trading at less than $1 - 50 to 60 US cents in recent weeks - there was a risk that they would be delisted.
Where shares trade below $1 for 30 to 90 days, Nasdaq can ask the company to delist.
The Trintech share consolidation has now quadrupled the unit value of each new ADR removing that danger.
