Wednesday, December 19, 2007

All time closing low - letter to management

It is unfortunate to see the stock hit a new all-time closing low of $2.61 today. The market has been volatile and the year-end selling has pushed UT even lower. I sent an email to management to see if they would be willing to hold an update call or meet with shareholders. The company has done a much better job in communicating with shareholders the last few months but I am taking this "opportunity" now that the stock has hit another low to question management if there are plans to support/defend the stock if it goes any lower. Here is my letter:

Dear Sirs,

Today, the stock closed at $2.61, the lowest closing price in the history of the company and 12% lower compared to 3 weeks ago during the shareholder meeting. While I appreciate the efforts for turning the company around in the long term, I would like to know what (if any) plans does management have to defend the stock price in the short term if it goes lower. Is there any price point that you would consider low enough to prompt a response from management.

I know there are a lot of issues that you have to deal with in the short term such as (1) selling holdings (Gemdale/Infinera), (2) finalizing/implementing cost savings plan, (3) closing the quarter, (4) planning for the convertible bonds, (5) working on/negotiating future contracts, and others. However, the current share price is at a point that I believe deserves your attention, We could all wait for possible further share price deterioration but I think that is unfair to all shareholders and that your responsibility is also to address the share price as it goes lower. I understand your position for focusing on running the business but as I’ve mentioned before, the share price cannot be avoided. I would like to ask if you would be willing to schedule a conference call to update shareholders or to meet with shareholders in Alameda early next year.

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