The suspension of Opticom does not reflect on Opticom as a company, but results from the manner in which Opticom provides information. Opticom represents a type of company that Oslo Børs wishes to see listed. The company has grown out of Norwegian research in an attractive new area, and is characterised by both high risk and great future potential. The Opticom share has attracted very considerable interest in the market ever since it was first listed, and turnover in the share has on occasion been very sizeable.
There can be little doubt that in the current situation a decision to invest in Opticom represents a decision to invest in the company´s agreement with Intel. However Opticom´s management has claimed that the agreement is secret and cannot be disclosed. This notwithstanding, various representatives of the company have from time to time leaked information on the financial implications of the agreement. These comments have, by and large, been the only factual information driving movements in Opticom´s share price aside from normal market considerations for the sector in which Opticom operates. The Opticom share has therefore become a typical "rumour" share.
It has become increasingly apparent as Opticom has pursued its agreement with Intel that this contract plays an entirely central role in any valuation of Opticom. This was demonstrated in a quite exceptional manner on 22 January, when Opticom issued a further announcement in this respect and carried out a private placement of shares after the close of trading to raise NOK 312 million without providing any further information on the Intel agreement. The Opticom share price rose by 31% over the course of the following trading day, showing a maximum increase of 77% during the day. Questions were raised following the private placement as to just what had taken place. Oslo Børs cannot see that any further information had been provided to give investors any basis on which to decide what would be an approximately correct market price for the share. The Opticom share price moved up from NOK 318 the day before the announcement in respect of the Intel agreement on 22 January to NOK 418 at the close of business on 23 January after having peaked at NOK 565 on that day. The share thereafter reached a low point of NOK 251.50 on 5 February. Given that the Intel agreement is central to the market´s pricing of Opticom, Oslo Børs decided to request a copy of the agreement signed with Intel. Opticom initially resisted this request, but subsequently allowed representatives of Oslo Børs to read the agreement at Opticom´s offices. However it became apparent that the material terms of the agreement made available had been censored. Oslo Børs accordingly instructed Opticom to immediately provide an un-censored copy of the agreement, and this was received by Oslo Børs on 12 February. Oslo Børs made this request in order to be in a better position to form a view on the commercial implications of the agreement. The principal issues involved include which party will meet the development costs, details of up-front and stage payments, success fees, royalty arrangements, volume estimates, unit prices etc. A number of these matters are difficult to estimate, and indeed Opticom itself cannot be certain of all these points, but in overall terms it should not be difficult to provide the market with an indication of the range of values that apply, possibly supplemented with information from Intel in respect of the competitive situation, areas of uncertainty and risk factors. Oslo Børs has never taken view that the agreement itself should be published, and the fact that Oslo Børs has itself seen a copy of the agreement does not satisfy or reduce Opticom's duty to disclose information to the market.
A meeting was held at 9.30 on 13 February at Oslo Børs where Opticom was represented by Thomas Fussell, Chairman of the Board and the company's legal adviser Morten Opstad, and Oslo Børs was represented by Håvard Abrahamsen and Sven Arild Andersen. Whilst the parties clearly had very different views on what information Opticom could provide about the agreement, the meeting took place in a constructive and positive manner. The Opticom representatives agreed that it should be possible to release further information, and promised to respond as soon as possible following consultations with Intel. Given the significance which the agreement with Intel has acquired, there can be little doubt that if Opticom were to have sought a listing now, the Intel agreement would have been a central feature of the Listing Prospectus and accordingly would have formed a central feature of the information on which investors would have relied when making decisions whether or not to buy the company´s shares.
Immediately after the end of the meeting, the Oslo Børs representatives were made aware of comments made by Mr Robert Keith, Managing Director of Opticom, to certain journalists, as distributed by news agencies and Internet news services at around 10.30 on 13 February. Mr Keith stated that the Intel agreement could generate annual royalty incomes for Opticom equivalent to the company´s current market capitalisation, that the share price would rise by many multiples of ten over the next 2-3 years and that the current pricing of the Opticom share did not reflect anything of the Intel agreement. These comments can be confirmed by several journalists, and have never been denied by Mr Keith. Oslo Børs immediately tried to contact Mr Keith for his comments, but he could not be contacted and no one at Opticom was prepared to comment on what Mr Keith had said. The Opticom share price rose by 15% in hectic trading, and in view of the lack of information from Opticom a halt was called to automatic matching of the Opticom share at 15.40. Opticom was informed that the share would be subject to a matching halt for the entire following day, 14 February, and would be suspended with effect from 15 February unless the company provided satisfactory information in respect of the comments made by Mr Keith.
On the basis of the discussions held with Thomas Fussell earlier in the day, Oslo Børs assumed that Opticom was already actively analysing the question of what information could be released, and further assumed that Mr Keith´s comments would markedly accelerate this process. This proved not to be the case. Oslo Børs has therefore clarified to Opticom, both verbally and in writing, that the market must be provided with information on the assumptions that formed the basis for Mr Keith´s comments, and this information must be based upon the agreement and the financial implications and risks which it implies. Oslo Børs has expressed the view that it is essential that the market should receive sufficient information to price the Opticom share in a realistic manner given the current level of uncertainty. Oslo Børs has not in any way insisted that the company should publish the Intel agreement itself. An evaluation of the estimated values that Mr Keith has indicated makes it quite clear that he has relied upon the terms of the agreement and assumptions he may have made in respect of unit price, volumes and royalties.
By the start of trading on 21 February, Opticom had not made any satisfactory response to any of the requests made by Oslo Børs. Oslo Børs has made entirely clear that it will take a constructive approach to any proposals made by Opticom, and the appropriate staff have been available at all times to consider any proposals in a prompt and efficient manner.
Oslo Børs is of the view that the company has shown a quite exceptional lack of respect for shareholders and for the most fundamental rules of the equity market. Oslo Børs fully appreciates that there are important commercial reasons for the stipulations imposed by Intel on the management of information relating to the agreement, and has heard the views of Intel representatives on this matter. However a company that wishes to enjoy the benefits of listing for its shares must also comply with the legal requirements to provide information. The company has a duty to provide the market with correct and relevant information on matters which are material to the ability of investors to price the share on the basis of their own risk evaluation. In the case of Opticom, the situation is reversed. The market is not provided with information, but the share price is continually influenced by various comments from the company´s management.
The company´s behaviour is entirely unacceptable, and Oslo Børs will consider a further escalation to the sanctions applied to Opticom if the current situation is not promptly resolved. Oslo Børs believes that the best alternative for Opticom is to produce, as quickly as possible, a proposal on how the duty of disclosure can be satisfied in respect of the Intel agreement. Oslo Børs wishes to repeat that it will consider proposals in a constructive manner with a view to trading in Opticom resuming as soon as possible.
