Saturday, May 22, 2010

Mitel Goes Public

I worked for Mitel for over 12 years. Over those 12 years there were good times but mostly bad times. There were pay cuts, many years with no raises and stock options in lieu of bonuses. Then there was the company stock purchase program. Yes, for only $1.50 and later $3.50 you could buy a Common share of Mitel stock in this privately held company to be redeemable when it goes public. We were told what a good deal this was, we would be investing in the company's financial future and subsequently ours, we could cash it all in when they went public and they would make it really convenient and do a paycheck debit for us.

Sounds like a good deal doesn't it? Well, it turns out that the rich get richer and the middle class get nothing. Mitel went public (Ticker symbol: MITL) on April 22nd, 2010. They hoped for $18 to $20 a share, it started at $14 and today, less than a month later it's hovering around $ 11.50, probably the reasonable value.

One week before they went public I received in the mail notice of a 15 to 1 Reverse split of my common shares. Basically, if you purchased 1000 common shares through the employee stock purchase program you now have 66 shares. If you bought them for $3500 they are now worth based on today's stock price, $770.22. Yes, every Mitel employee got this "deal". I'm sure not about the big wigs, they probably had something other than "common" shares (I believe they are called Preferred Shares) and probably didn't have to trade those in so I'm sure they made out like bandits.

Welcome to the middle class. Bend over.

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