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Telemedia backs up stock hike

By Phil Boeyen, ShareChat Business News Editor

Tuesday 24th April 2001

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Communications software company Telemedia has told the ASX that its share price has moved to a more realistic level following confirmation of its move to a US-incorporated company.

The ASX was querying the company over its share price hike from A30 cents in the middle of last week to recent trades of more than a dollar.

Telemedia says it is not aware of any information besides a statement which was released before the market opened last Friday.

In that statement Telemedia announced that its board had been restructured with the addition of two US-base non-executive directors - Sun Microsystems chief financial officer and executive vice president, Michael Lehman, and Qwest Communications' chief information officer and executive vice president Cliff Dodd.

Telemedia said in the announcement that the appointments were a major step forward for the company's transition to the United States.

"North America is a key market for us. Our attack on the US will get a major boost with the appointments of Michael and Cliff - both high profile people in the US telecommunications sector," said Telemedia CEO Chris Jones.

"We have an excellent footprint for growth there and are making good inroads, with the goal being to secure more tier one carriers in the US."

Following the market announcement the Sydney Morning Herald had questioned the stock's rise in the four days prior to the news, claiming it had "caught the eye of corporate regulators, concerned price hikes before announcements are becoming a habit."

However Telemedia says its share price only started moving on the 19th of April.

"On that day the whole market moved considerably on the back of the US cut in interest rates and the significant increase on the Nasdaq market," the company says in a statement.

Telemedia goes on to say that there is the possibility that its stock was oversold at the time it saw the rapid drop in the price, and that the recent news has boosted confidence in the security.

"This in turn has seen the market move to a value they believe is realistic given the recent announcement."

Telemedia shares are currently trading around A85 cents, three times their value at the start of last week but well down on highs of more than A$8 a year ago.

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