Smith Micro Stock Retreats After Sales Executive Quits

Smith Micro Software’s stock, which rose sharply on its first day of trading last week, fell nearly 20% Wednesday when the company said its top sales executive had resigned after only three weeks on the job.

The stock in the software developer closed Wednesday at $9.875 a share, down $2.375 a share in Nasdaq trading. Smith Micro had closed at $14.50 a share on its opening day Sept. 19.

More than 200 concerned investors and analysts called the Aliso Viejo software developer Wednesday to find out about the departure of Eric Seedman as vice president of sales, said Charles M. Spear, Smith Micro’s chief financial officer.

He said that investors’ fears were unwarranted. “Eric was a relatively recent employee, who was not in the mainstream of what we do,” Spear said. Seedman, however, had worked as a Smith Micro sales consultant for a year before he started as an employee early this month.

Spear said investors were concerned about how Seedman’s departure might affect the company’s relationship with U.S. Robotics Inc., which accounts for almost half of the company’s annual sales. Seedman’s brother, Michael Seedman, is an executive at Robotics in Skokie, Ill.

Robotics officials would not comment.

Smith Micro signed a one-year deal in July to continue selling its modem and fax communications software products to Robotics.

In its prospectus for its initial public offering, the company pointed out that the Seedman brothers also founded Practical Peripherals Inc., another of Smith Micro’s major customers. The Seedmans sold the Thousand Oaks modem manufacturer in 1989 to Hayes Microcomputer Products Inc.