Wellman Inc. (NYSE:WLM) shares dropped over 60 percent after the company reported steep quarterly losses but announced its board of directors was evaluating strategic alternatives. Shareholders are hoping to recoup some of their losses or even realize a profit through a potential sale of the company; however, whether or not this will materialize remains a mystery.

"Our Board has decided to explore strategic alternatives for Wellman before we begin the task of refinancing our debt in 2008," said chief executive Tom Duff. "We have engaged Lazard Freres & Co. LLC, an investment bank with extensive experience in chemical M&A transactions, and hope to expeditiously conclude this process."
 
Wellman reported a net loss of $26.3 million, or $0.81 per share, compared to a net loss of $37.9 million, or $1.19 per share, a year ago. However, the company announced that it would further streamlining their operations and expect to reduce thleir 2008 costs by $20 to $25 million compared to 2007 levels. Mr. Duff stated, "Our financial results in the third quarter were negatively impacted by increased competitive pressures as new PET resin capacities were fully introduced into the NAFTA market."

Wellman is currently trading with a market cap of just $23 million and a share price under $1. The NYSE prevents stocks from trading below a dollars, which means that the company will eventually receive a delisting notice unless they do a reverse stock split or appreciate in value. Unless the company can sell itself, it will be in some serious trouble. However, if it can sell itself, we could see upside from this price. Combined, these factors make WLM a stock worth watching!

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