Sync Research Plans Reverse Split of Stocks

Sync Research Inc., once a Wall Street star, has fallen on such hard times that it is battling to keep from being thrown off the Nasdaq national market.

The Irvine network-device maker said Friday it plans a reverse stock split in an effort to push its shares high enough to stave off delisting.

On Monday, the company expects to implement a reverse 1-for-5 stock split, shrinking its outstanding 17.5 million shares to 3.5 million, said William Guerry, Sync’s chief financial officer. Shareholders approved the plan at the company’s annual meeting earlier this month.

“We’re trying to move forward and stabilize the company financially,” Guerry said. “We definitely would not be doing this had there not been a serious delisting potential.”

Guerry declined to comment further. Nasdaq officials could not be reached for comment late Friday.

Sync Research went public in 1995 amid a media fanfare over its line of devices that helped companies get more mileage out of their aging IBM mainframe computer networks.

The 3.9 million shares were initially priced at $20 apiece, but finished the day at $44 and beat the ballyhooed IPO success of Netscape Communications Inc. The stock eventually hit the mid-$50s.

But since 1996, when the company started to move scores of these older machines into the modern networking world, Sync’s performance has fallen short of Wall Street expectations.

Analysts say deals often were slow in coming, competition was increasing and losses, which have plagued the company since its launch in 1981, continued to grow.

The stock started to drop, despite endorsements from heavyweights including AT&T;, IBM and Sprint, and rave reviews of its products from early customers. Sync’s executive offices endured several shake-ups. Sync has restructured itself companywide at least twice, cutting its worldwide staff from over 200 in 1997 to about 120 people now. About 70 people work in Sync’s offices in Orange County.

This year, Sync’s stock price hovered around $1--the minimum level required for Nasdaq listing--until mid-February. Then it began moving lower. On Friday, the shares closed unchanged at 47 cents.

In the next few months, Sync expects to make several key technology investments, Guerry said. The company declined to elaborate.