TowerStream Dips on Nasdaq Opening
The seven-year-old company has been trading on the Nasdaq Over-The-Counter (OTC) Bulletin Board since January through a reverse merger with ailing Canadian calendar producer, University Girls Calendar Ltd! TowerStream's shares closed on that board on Wednesday at $7.66 each and opened on the Nasdaq Capital Market this morning at $7.75. (See TowerStream's Seattle Speakeasy.)
TowerStream said on Wednesday that it would offer up to $40 million in common stock in the float. The Middletown, R.I.-based operator is now trading under the ticker symbol "TWER" on the former Nasdaq small cap market. (See TowerStream's Biggest Test Yet.)
By the end of the afternoon's trading, the firm's stock had fallen 23 cents, or 3 percent, to $7.46 a share. That's not as precipitous as Clearwire's post-IPO fall -- the Kirkland, Wash.-based operator's shares dropped more than 9 percent in value on the day after the float -- but shows that the market is still wary of WiMax.
TowerStream's latest financial numbers show why:
In a Securities and Exchange Commission (SEC) filing, TowerStream says it made a net loss of $1.64 million for the three months ended March 31, 2007, compared to net income of $15,124 in the same period last year. Revenues were up 4.3 percent to $1.58 million over the year.
TowerStream blamed the loss on non-recurring costs related to recent equity and debt financing and recurring costs associated with going public and expanding its markets. "We believe that net losses will continue as we make required additions to our sales, engineering and administrative personnel and network in order to increase revenues and subscriber growth," it says in the SEC papers.
The operator currently offers T1-class wireless connectivity for business users in major markets such as New York City, San Francisco, Los Angeles, Chicago, Boston, Seattle, Miami, and Providence and Newport, Rhode Island.
— Dan Jones, Site Editor, Unstrung