'Born-again’ network security and education software firm, Corero Network Security, has warned that unless it can raise £4m through a heavily discounted share placing, it may not be able to continue development on its flagship ‘first line of defence’ (FLoD) security device. Corero warned last month that FLoD sales were below expectations and that the company will report FY losses when it releases its results in March (see Corero ‘FloD’ still a trickle). The placing will offer shares at 15p, less than half the value they had been trading at since late last year until the prior warning, after which Corero’s shares fell to around 20p.
Everybody and their mother are trying to take a stake in the network security market and clearly there is not space for them all. Whether or not Corero’s FLoD device is the bees knees or its elbows, I suspect clients will tend to select trusted brands – almost by definition.
Let’s hope that the fall-out – if indeed that is CNS’ ultimate fate – will not cause harm to Corero’s near-orphaned Business Systems division (software for the UK education market), which is a nice little earner.