Soapstone on Slippery Slope?

Soapstone Networks (Nasdaq: SOAP), the former Avici Systems, announced today that it's looking into options that could be as drastic as a selloff of technologies or a complete shutdown.

The decision was driven by a need to get cash back to shareholders, CEO Bill Leighton said in the company's press release. Soapstone has enlisted Morgan Stanley to help sort the possibilities. (See Soapstone Seeks Options.)

Some of the options listed aren't so dire, such as a cash dividend or a stock repurchase.

But the possibility of closing or selling off the company looms large. Such moves would put an end to the long struggle that began with Avici entering the core router market, then later offering up control-plane technologies. (See Avici Abandons Routing, Targets PBT, The Core Was Rotten for Startups, and Soapstone Shores Up Ethernet.)

Last week, Soapstone announced plans to trim full-time staff by 10 percent and contractors by 75 percent. Soapstone had 79 full-time employees as of Dec. 31, 2007, according to SEC filings. (See Soapstone Reports Q4 .)

Founder Larry Dennison left the company late last year for his next startup, Lightwolf Technologies, a move that now looks like an ominous bit of foreshadowing. (See Soapstone Shocker: Founder Flees, Larry Dennison: He's Baaaaack!, and Thinking Virtual With Larry Dennison.)

— Craig Matsumoto, West Coast Editor, Light Reading