Neutral Tandem Insiders Scramble To Sell Into Lock-Up Expiration (TNDM)

Neutral Tandem, Inc. (NASDAQ: TNDM) has filed to sell 4.5 million shares of stock in a secondary offering this morning via underwriter Morgan Stanley.  The use of proceeds is zero for all practical purposes for the company as all of the shares being sold are by selling shareholders.

This represents 14.3% of total common stock outstanding based on a 31.3+ million share count listed.

The company provides tandem interconnection services to competitive carriers, including wireless, wireline, cable and broadband telephony companies.  As of December 31, 2007, Neutral Tandem had 78 major competitive carriers and non-carriers connected to its network.

The insiders and original backers aren’t wasting any time here.  The company has only been public since November 2007, so they are lining up to sell the most they can under the 6-month lock-up agreement.  Shares closed at $20.18 yesterday, and the post-IPO trading range is $16.51 to $23.00.  This was actually a fairly hot IPO at the time as it priced 6.6+ million shares at $14.00 per share on its IPO.

Jon C. Ogg
March 13, 2008