Empire Capital adviser recommends changes to Tumbleweed Communications

By Lisa Kerner

Charlotte, N.C., Feb. 5 - Tumbleweed Communications Inc. investors led by Empire Capital Management, LLC bought 144,276 shares of the company's stock for a total of $218,981.16 between Dec. 18 and Jan. 31 for a total stake in the company of 12.9%.

The transactions were reported in a schedule 13D filing with the Securities and Exchange Commission.

The investors beneficially own 6,613,894 shares of Tumbleweed stock for which they paid $17.1 million.

According to the filing, Empire Capital intends to continually "review the company's business affairs and financial position and future prospects."

On Jan. 30, Hamilton-Madison Group, an adviser to the investors, delivered a presentation to Tumbleweed's board of directors urging the board to:

• Complete the transition to a channel sales strategy by the end of the second quarter;

• Immediately reduce operating expenses in all areas to generate operating profits and cash; and

• Hire an investment banking firm to assist the board in exploring all strategic alternatives to maximize stockholder value.

Tumbleweed, based in Redwood City, Calif., provides messaging security solutions.

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