McAfee's MGT sinks 21 percent after NYSE refuses share listing

Tue Sep 20, 2016 2:01pm EDT
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By Noel Randewich

SAN FRANCISCO (Reuters) - Shares of MGT Capital Investments MGT.A, led by anti-virus software pioneer John McAfee, dropped 21 percent on Tuesday after it said the New York Stock Exchange denied approval of the listing of shares for a planned merger with anti-spyware company D-Vasive Inc.

The steep plunge in MGT brings its losses over two days to about 40 percent after the company said on Monday it had received a subpoena from the U.S. Securities and Exchange Commission.

In May, MGT surged more than 1,200 percent after the mobile gaming company announced it would transform into a cybersecurity company and be led by John McAfee.

As part of the deal, MGT said it would issue 43.8 million shares to acquire assets from McAfee's D-Vasive Inc. McAfee would become chief executive and MGT would change its name to John McAfee Global Technologies, Inc.

MGT said it was exploring alternatives and remained committed to the deal. McAfee is currently MGT's executive chairman and he has been the company's main voice in press releases and on Twitter since May.

MGT's stock was down 55 cents on Tuesday at $1.97 and its market capitalization was at about $50 million. The former penny stock remains up over 500 percent from the end of April.

Under NYSE rules, already-listed companies that merge may be required to meet the standards required of companies wishing to list their shares for the first time.

The NYSE did not give MGT a specific, formal reason for denying the share listing, company spokeswoman Tiffany Madison told Reuters by email.   Continued...

Computer software pioneer John McAfee speaks with reporters outside his hotel in Miami Beach, Florida December 13, 2012. REUTERS/Joe Skipper