Storage Soup

Dec 22 2009   4:50PM GMT

Overland’s woes continue

Dave Raffo Dave Raffo Profile: Dave Raffo

Struggling tape vendor Overland Storage is battling to keep its listing on the Nasdaq Stock Market despite missing its Dec. 14 deadline to get its minimum value of shares above $15 million.

Overland last Friday night requested an appeal before a Nasdaq Hearings Panel, automatically delaying the delisting of its common stock until the panel makes a ruling. The hearings panel can grant Overland an additional 180 days to regain compliance.

According to a press release issued by Overland Monday night, “Any delisting of [Overland’s] common stock by Nasdaq could adversely affect [Overland’s] ability to attract new investors, decrease the liquidity of the outstanding shares of common stock, reduce its flexibility to raise additional capital, reduce the price at which such shares trade and increase the transaction costs inherent in trading such shares with overall negative effects for [Overland’s] shareholders.”

In other words, it would likely force Overland to go under or go private. Overland executives have already made it clear the company will need extra financing to survive. The company’s tape business has been losing money for years, and it’s recent move into disk-based backup and Snap NAS servers hasn’t been able to save it. Overland has cut staff over the past few years, and last year named former Snap chief Eric Kelly its CEO.

Overland lost $3.7 million on income of $19.3 million last quarter. Over the last four quarters, it lost $14.9 million on $93 million in revenue.

Overland’s stock is trading at $1.95 a share following a recent one-for-three reverse split but the total value remains about $2 million below the $15 million threshold.

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