Ex-U.S. Official Buys 15% Stake in Defense Firm
Paul Thayer, a former Pentagon official who served a one-year prison term in connection with insider trading charges, has purchased a 15% stake in Computerbase International Inc. of Irvine, the company disclosed Thursday.
Thayer’s investment, which has an indicated market value of $4 million, makes him the largest single shareholder in the small defense technology firm.
Computerbase said Thayer bought his shares in privately negotiated transactions with unidentified shareholders.
A company spokesman said he did not know how much Thayer paid for his stock, which he apparently purchased with his own funds. Thayer, who lives in Dallas, could not be reached for comment.
In July, Computerbase announced that the reclusive Thayer had joined the firm’s board and would head an effort to raise $9 million in development funding and solicit potential customers for a new defense-related computer system designed by the company.
Thayer is receiving no cash compensation for his work on behalf of Computerbase, although he has received stock options that can be exercised at a profit if the company’s stock value increases.
Former Fighter Pilot
About 80% of Computerbase’s 112 million shares are owned by Thayer and other officers and directors of the firm. The remaining 20% are traded publicly by a handful of over-the-counter market makers. One firm said the shares sell for about 25 cents each.
Thayer, 67, is a former fighter pilot ace who served as chairman of giant LTV Corp. in Dallas before President Reagan appointed him deputy defense secretary in 1983.
He resigned the Pentagon post a year later when the Securities and Exchange Commission accused him of illegally passing non-public information about pending corporate activities to friends and associates who used the tips to make profitable stock purchases.
In 1985, Thayer pleaded guilty to charges of obstruction of justice. He served 12 months in federal prison and six months in a Dallas halfway house before his release earlier this year.
One Computerbase market maker believes the stock, which has traded in a range of about 10 cents to 50 cents per share since the company went public about a year ago, could appreciate substantially if Thayer’s efforts pay off.
“He has significant contacts in the defense industry, and his aid is going to be of benefit to the company in the future,” said Mark Salaman, vice president of Escalator Securities Inc. in Willow Grove, Pa. “In my opinion, it’s strictly a bet on Mr. Thayer and his involvement with the company.”
In a prepared statement, Computerbase President Richard Manweller said he believes that with Thayer’s guidance the firm’s annual sales can grow from $2 million to as much as $200 million within five years.
