Flood of TTPcom shares feared as lock-ups expire

Shares in TTP Communications, which supplies technology for wireless devices, are set for a rocky ride this week as 62.5 per cent of the company's shareholder base is freed from a lock-up that previously prevented them from selling the stock.

While many recently floated technology companies have had to face the expiry of shareholder lock-ups, few have affected such a large number of shares.

The 62.5 per cent of TTPcom shares, which become free, includes an 8.2 per cent stake held by Vision International of Australia and a 12.4 per cent holding by TTP Group, the private technology firm which created TTPcom.

Around 45 per cent of the company's shareholders are categorised as staff and include current and former employees of both TTPcom and its parent TTP Group. All of them will be able to sell as of this morning.

Since its flotation on the London Stock Exchange a year ago, the only major investor able to sell shares was venture capitalist 3i. It sold 6.4 million shares at the start of this year, taking its holding to 7.05 per cent.

While it is unclear how many shareholders plan to reduce their holdings, the expiry of the lock-up is likely to hit shares in TTPcom. However, analysts say any downward pressure on the company's share price could well be tempered by the publication of its half-year results on Tuesday.

Analysts are forecastingTTP to turn out a six-month ended September pre-tax profit of £2m to £2.5m, on turnover of around £17m.The company floated at 245p a share and hit a high of 333.5p shortly after. On Friday, it closed at 105p, albeit well off last month's 77.5p low.

TTPcom, which last month signed up two major customers in Japan, eventually hopes to sell or float ip.access, a division which has the technology to improve mobile phone coverage in buildings and other areas. Given the state of the equity markets, however, such a move is not expected for some time.

TTPcom was recently criticised by stockbroker Williams de Broe. It said the firm's royalty revenues were, by no means, guaranteed – about 50 per cent of its design wins would not make it to production and sales would continue to rely on new licensing deals.