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Openwave COO in Big Stock Sale: HALF-MILLION SHARES WORTH $10.3 MILLION

Posted on: Monday, 20 February 2006, 09:00 CST

By Jack Davis, San Jose Mercury News, Calif.

Feb. 20--Openwave's chief operating officer, Allen Snyder, sold nearly half a million shares worth $10.3 million in the first three days of February, twice as many shares as he has sold in total since joining the company five years ago.

From Feb. 1-3, Snyder spent $2.7 million exercising options to buy 364,229 shares of the Redwood City supplier of mobile phone software, from $1.86 to $11.82 each. He then sold those newly acquired shares, along with 121,852 he already owned, at prices ranging from $20.68 to $21.60 a share.

Until 2005, Snyder had traded only 11,784 shares of Openwave. But in February last year, he set up an automatic stock-sale plan adopted under the Securities and Exchange Commission's 10b5-1 rule, allowing company insiders to sell a set amount of stock over a prearranged period .

The plans are one way to avoid possible questions about whether insider sales were timed to take advantage of non-public information.

Last year Snyder sold 190,186 shares under the plan, in increments ranging from about 11,000 to 21,00 a month spread out over 10 months.

His most recent sales were not according to a 10b5-1 plan, however, and dwarfed any previous monthly transactions. The sales reduced the size of his Openwave stock ownership by nearly half to 141,178 shares.

His stock sales followed the Jan. 26 release of Openwave's fiscal 2006 second-quarter results showing sales of $104 million and its first quarterly profit in a year, which surpassed Wall Street expectations and sent its shares up 17 percent.

When Snyder joined Openwave at the beginning of 2001, its sales were headed toward a record $470 million in fiscal 2001, more than triple the year before, while its net loss was heading toward $700 million. The company's stock was trading above $100 a share, down from the $600 level it reached on the day the Nasdaq peaked March 10, 2000, but still far ahead of its $24-a-share price when it first went public in 1999.

In the wake of the dot-com bust, Openwave sales fell more than 20 percent each of the next two years, and have yet to match their previous high, although sales have topped $100 million in each of the past four quarters. The company has yet to record an annual profit and has undergone five separate restructurings since 2001.

Openwave shares fell as low as $1.38 when U.S. stock markets bottomed in October 2002. It performed a 1-for-3 reverse stock split in 2003 in an effort to bolster its stock price. And to keep employees motivated, the company has twice repriced options granted to them during the heights reached during the Internet boom, including those granted to Snyder, so that they would still be worth something despite the stock's steep drop.

Stock-option holders have the right to buy shares for a set price, usually for 10 years. But if the stock price falls below the holder's strike price, the options become essentially worthless, or "underwater."

Openwave's shares have risen 22 percent so far in 2006, closing Friday at $21.17.

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Copyright (c) 2006, San Jose Mercury News, Calif.

Distributed by Knight Ridder/Tribune Business News.

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Source: San Jose Mercury News

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