Sector Update: Technology


Technology stocks are broadly lower, with shares of technology companies in the S&P 500 sinking 1.0%.

In company news, WPCS International Inc ( WPCS ) is down more than 45%, steadily losing ground after announcing a deal to acquire BTX Trader, which is developing a proprietary trading platform for the bitcoin industry.

Shares recently traded at $1.71 a share, sinking 45.4%, after earlier falling to a new, all-time low at $1.57. Perhaps in response to the sharp decline in its stock price, WPCS this afternoon said it has re-scheduled a conference call to Thursday to discuss the BTX Trader acquisition along with its fiscal Q2 financial results. The conference call will be held after the market close at 5 p.m. ET.

In announcing the purchase last night, WPCS said it sees the deal adding a new line of business for the communications-equipment manufacturer. Terms of the transaction were not immediately disclosed but the company said it will fund the acquisition with the sale of Series E preferred stock, selling 2,348 of the shares for $1,000 each, generating nearly $2.35 million in gross proceeds.

Each preferred share will pay 12% interest per year and is convertible into common stock at its stated value plus accrued dividends divided by $3.50 per share. The company also issued warrants to purchase an additional 1.5 million shares, exercisable at $5 apiece.

The deal will require WPCS to seek shareholder approval to increase its authorization to issue up to 75 million shares.

WPCS originally had planned to release its Q2 financial results for the three months ended Oct. 31, followed by a call-in conference discussion, on Dec. 16 but cancelled those events last week without disclosing a reason.

In other sector news,

(+) GRPN, (+2.8%) Northland Capital Partners begins coverage of the daily deal company with an Outperform rating and a price target of $13 a share.

(-) GOGO, (-12.9%) Ripplewood Holdings distributes all 27.6 million shares of GOGO stock it owns to the private-equity fund's limited partners. Three Ripplewood-affiliated directors on the GOGO board also resign.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: WPCS

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