FVC.com (Nasdaq: FVCX) said Friday it will get a major investment from Vulcan Ventures Inc., the investment organization of Paul G. Allen.
Shares the maker of video networking products for broadband communications closed at 7 1/32 Thursday. The investment is a much-needed vote of confidence in the stock, which has plunged since the company warned of a weak first quarter in April.
Vulcan Ventures has purchased $27.4 million of preferred stock, convertible into approximately 3.4 million shares of FVC.com common shares at a price of $8.00 per share. With this investment, Vulcan owns approximately 16.5 percent of FVC.com's outstanding shares. Vulcan also received warrants to purchase an additional 850,000 shares of common stock at $7.00 per share.
"This investment is a significant milestone for FVC.com, and will enable us to accelerate strategic initiatives within the broadband video systems and services businesses,'' said Richard Beyer, president and CEO of FVC.com. ``Vulcan's vision and contributions to the development of broadband infrastructure and applications are substantial, and we're delighted about the opportunity to work with their portfolio of companies to accelerate the adoption of two-way video over the broadband Internet.''
FVC.com has begun a trial of its latest application for two-way video, Click to Meet, with RCN Corporation (Nasdaq: RCNC), a fellow Vulcan Ventures portfolio company.
The company's top competitors incude Cisco (Nasdaq: CSCO) and Marconi Communications, according to Hoover's Online.