Option NV, the Belgian maker of wireless broadband-access devices, fell the most in more than seven months after saying it was seeking a cash injection of at least 5 million euros ($6.4 million) by year end.
Option declined as much as 18 percent and traded 6 cents lower at 34 cents a share at 10:50 a.m. in Brussels. That’s the sharpest drop since Feb. 23.
The company’s board is investigating “different options to strengthen its working capital” in an effort “to secure the prospect of regaining profitability and sustainable growth,” Option said today in an e-mailed statement. On June 30, the company had 13 million euros of cash on hand, down from 25.2 million euros at the start of the year, Option said on Aug. 31.
Since the end of the first half, the cash position “has been further impacted by the build-up of inventory and the longer sales cycles for the new products,” Option said.
The 5 million-euro amount is “only a first step,” KBC analysts said in a note today. “More drastic” measures are needed, said the analysts, who have a sell recommendation on the shares. “So far, Option has been unable to prove that its strategy -- focusing on value-added products, away from commoditized hardware -- is successful,” they said.
Option said it is continuing its efforts to reduce costs while at the same time seeking to develop its brand name and adding sales channels in North America, China and Europe.