Neoforma.com is asking shareholders to approve a reverse stock split that would swap one new share for 10 current shares, in part to bolster sagging share prices and maintain its listing on the NASDAQ exchange.
In addition, the young and still unprofitable e-commerce company wants to drop the "dot-com" suffix from its official name to better reflect its status as a private online marketplace for its customers. Neoforma operates the Internet marketplace for Novation, the joint supply company of VHA and University HealthSystem Consortium, which combined own a majority stake in the company under a 10-year agreement.
The proposed name change was one of several made by healthcare companies last week as they look for new, and in some cases old, identities (See story, p. 13).
San Jose, Calif.-based Neoforma outlined its proposals in a preliminary proxy statement filed July 3. The company's shareholders will be asked to approve them at an Aug. 13 annual meeting.
The company said it wants to give its board the discretion to implement a reverse stock split at an exchange ratio of one-for-six, one-for-eight or one-for-10 at any time prior to the 2002 annual meeting. The company said the split would bring the number of outstanding shares of Neoforma's common stock-currently 183 million-to a number more in keeping with comparable companies in the healthcare technology industry.
Perhaps most important, a reverse stock split could act as a parachute if or when the company faces a delisting from NASDAQ. Although it is meeting other requirements, Neoforma shares are trading below the $1 minimum bid price required by the exchange, the company said.