Plans for Merger Stall as e-Point Stock Soars After London Attacks

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Sometimes good press is a bad thing. Global e-Point Inc. had been doing just fine making video surveillance systems for the inside of aircraft and squad cars so much so that CNBC’s Jim Cramer highlighted the City of Industry-based company on his “Mad Money” show.


It was the same day that a second set of bombs went off on the London transit system and the same day that the City of Industry-based company introduced a public transportation surveillance product for subways and trains.


The stock nearly doubled over the next few days, going from $3.43 to more than $7 per share.


Normally it’s a good thing for public companies when their stock rises. But the windfall is playing havoc with Global e-Point’s previously planned reverse-merger with Astrophysics Inc., a privately held maker of airport X-ray systems, also based in City of Industry.


It was to be a cash-and-stock deal, with Global e-Point paying $10 million in cash and giving Astrophysics 51 percent of its stock. When the deal was announced in June, Global e-Point was trading at $2.88.


Technically, Global e-Point was the buyer, but Astrophysics would have had control of the merged company. But at $5.60 a share or so last week, Global e-Point’s stock was worth $70 million, nearly double from when the deal was struck. (Cramer advised his viewers to sell when the stock was at between $6 and $7.)


On Aug. 4, Global e-Point announced that it had reached an impasse with Astrophysics. Company officials didn’t return calls.


The failure to close the deal keeps Global e-Point from getting into a multi-billion dollar market for X-ray screening systems.


“That’s where all the value was,” said Jim Gentrup, an analyst with Phoenix-based Provident Equity Research. “When the company was mentioned on theStreet.com, it caused a big rush in the shares. But I don’t know if their results justify that.”


Astrophysics manufactures baggage-screening systems that work on the Windows computer platform. It started selling products in 2003, gaining airport contracts in China, Saudi Arabia and Australia.



Eye-Full Towers


In a bid to blanket L.A. with its signal, Cingular Wireless LLC has announced a $1 billion investment in wireless sites in California. The company installed 25 cell sites in greater L.A. in June, and plans 340 new sites in Southern California by the end of the year. “We’re working toward the goal of providing the most robust network in Southern California,” said Art Navarro, Cingular’s spokesman.


Verizon Communications Inc. invested $600 million in the state last year, with roughly two-thirds going to Southern California, according to spokesman Ken Muche. The company has spent $3.3 billion in the state over the past five years.


Sprint Corp. invested nearly $200 million in L.A., Orange, Riverside, San Bernardino and San Diego counties last year. “It’s not a matter of how many sites you have, but the amount of coverage,” said spokeswoman Kathleen Dunleavy.


For all the investment, none of the companies has eliminated dropped calls and dead zones.


To keep its towers from becoming eyesores, the company camouflages them in designs such as artificial palm trees. “If we think stealth is appropriate, we go stealth,” he said.



Staff reporter Hilary Potkewitz can be reached by phone at (323) 549-5225, ext. 226, or by e-mail at

[email protected]

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