Shares in Diligent Board Member Services Inc (DBMS) took a 24 per cent (12 cent) plunge to 38 cents today following Friday's sales warning.
Volume was modest at 20,000.
Shares in DBMS were issued at $1 each in December in one of the few IPOs of 2007. Theinitial public offering (IPO) raised $24 million for the New York-based software company.
Original shareholders are likely to have to surrender up to 20 per cent of their original holding as warranties they gave on sales targets now unlikely to be met.
DBMS said on Friday that based on the results of the first 4-1/2 months of 2008 and prevailing market conditions, it believes it is unlikely to meet its prospectus growth by the end of the year.
In a highly unusual move in this country, the original owners of DBMS promised as part of the IPO that if annualised licence fee (ALF) sales failed to meet targets they would surrender up to 20 per cent of the original share capital.
That now appears likely to be triggered in part or full, the company said on Friday with sales hit hard by the recession in the United States.
The company sells and licenses software that looks after the paperwork for corporate board members.
The IPO turned into a fiasco when it was revealed founder Brian Henry had failed to disclose details about his and brother Gerald Henry's connection to New Zealand company EnergyCorp which failed spectacularly in the 1980s.
