Videoconferencing specialist VideoLAN Technologies Inc, one of the hottest initial public offerings of 1995, has ceased trading. In an open letter to shareholders last week, chief executive Jack Shirman, said The videoconferencing market had not developed as rapidly as expected and other companies in the industry were facing financial problems as well. This made raising additional funds under favorable terms impossible. The situation was compounded by a shareholder class action lawsuit against the Louisville, Kentucky based company. As a result, the investors for the $4.0m funding VideoLAN did manage to raise to continue development and marketing of its VL2000 videoconferencing product, decided to revoke the deal. VideoLAN maintains that the lawsuit has no merit. As events unfolded, the company’s already weak stock price saw continuing deterioration. The senior management have agreed to stay on unpaid to dispose of the assets. The company started with high hopes of finding a mass market for its technology, designed to transmit full motion live video over ordinary copper telephone wires, and won an early supporter in the shape of Samsung Electronics Co (CI No 2,789). But VideoLAN spent much of 1996 looking for experienced management to run the company. The acquisition of the assets of ImageLink Inc, a supplier of low end videoconferencing systems, brought with it a much needed $10m multi-year product order. But after peaking at $2.0 at the end of 1995, the company’s shares went into steady decline, ending at just $0.016.
