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VTSS Investor Forum

When is this DO NOTHING Board of Directors going to get off their ass?

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I've never seen such an incompetent, impotent board of directors. Year after year of watching mediocrity play out before their eyes followed by excuse after excuse. Mgmt always finds a way to pat themselves on the back though, that much you can consistently count on. I love the way they tout new product revenue as a % of total revenue, rather than pure dollars. With total revenue (the denominator) falling so much, of course that new rev % is going to look like a big number. Give MIndspeed some credit, their board decided to act, and act they did. I guess this board will remain in their catatonic state, paralyzed by their own indecisiveness for the forseeable future. Maybe Billy needs more seats. How much longer can this debacle possibly go on without them taking some significant action. I guess the answer to that is forever, based upon what we've seen. Maybe if we can get enough embarrassing commentary going on this thread, they could possibly awake from their haze (induced by what, I am still baffled by).

Posted by sharpinvestments - 10 years ago

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I thought there was a ray of hope when Billy Martin got a couple of Board seats, but maybe the malaise is contagious.

In Barron's this week (Dec. 9) under 13-D Filings there was one for Triquint (TQNT) that I wish would happen to Vitesse:

Dec. 2- Starboard Value sent a letter to TQNT's BOD stating belief "shares are deeply undervalued and that there exist opportunities for value creation". In summary, they voice serious concerns with TQNT's prolonged underperformance under current management and BOD. Substantial change is needed on the board to ensure actions are taken to improve execution , drive better financial performance, and create shareholder value.

They proposed an alternative slate of six Directors. They own 7.8 % of voting shares.

Where is our "Starboard Value" proactive investor(s) ??

Posted by Techinvestor - 10 years ago

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Flow finally gave up. After decades of going nowhere Flow International (flow) sold itself to private equity. VTSS should do the same. But my suspicion is they can't find any takers.

The verdict on expectations for 2014 is in. The stock is off 5% today (in an up market), All of the institutional holders of VTSS, and all of the rest of us, got told 2014 is in the tank. I can't imagine the institutional guys will let the money stand idle for the next 18 months especially given the horrible track record of this management. At some point it is time to let this puppy go. I think that point was about 7 years ago.

Posted by dlog - 10 years ago

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They need to make a decision. They need to get this pig sold. If they do it sooner, they need to devote some of the cash to cleaning up the balance sheet, even if Fat Andy will have to take a premium to walk away. No one is going to buy a business with this complicated a balance sheet, even with the cash sitting there.

If they want to do it later (start of 2016 with $40M quarters), then they have to start addressing the fact that the timetable is off -- will VTSS even make it to 2016 at this rate? Gardner did say that the June quarter (reported in September '14) will still be on-target at $30M -- does anyone believe him at this point?

As if to underscore the lack of credibility, Tomasetta and Hovanec skate the day after Gardner announces the first quarter miss. Has the market concluded that design wins are to Gardner as channel stuffing and back-dating was to Tomasetta? It wouldn't be a huge stretch.

I'm a little disgusted as this slides back toward $2.

Posted by phobos - 10 years ago

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By contrast Micron (MU) is up 4X in the last 12 months.

Posted by dlog - 10 years ago

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WE must now ask ourselves this question: when is the next time we could hear good news and what could that news possibly be?

It isn't the March quarter earnings report. It isn't the June quarter earnings report of showing a Non-GAAP Operating profit of break-even. Given the long lead time for revenue to materialize one must think September 2014 revenue and earnings will be suspect as well.

so what could it be? More design wins. This has run its gamut. Announce all the design wins you can think of and it will do nothing. There is no evidence that design wins turn to revenue.
Gardner even spoke enthusiastically of a new product that could (or would) be $10 million in revenue per year. This statement may be most notable for the fact that Gardner is getting excited about a new product that will have little impact on improving the revenue stream.

New product development? By managements own admission the time lag from development to revenue could be 2-4 years. Gardner has already gone through 2 of these product development cycles and neither one has produced any meaningful revenue growth.

Senior, non-Gardner management change? no way this has an impact. I am not sure throwing out Gardner would have an immediate upside impact on the stock. But it just might.

So what are we left with. A revaluation upwards of the industry that VTSS stock may participate in. A revaluation of securities in general upward VTSS stock may share in. In otherwords some external event or events that impacts VTSS irregardless of what is going on at the company. And you can get that impact in many, many other stocks.

And the announcement of someone buying VTSS.

that is pretty much it as far as I can see.

Posted by dlog - 10 years ago | Updated 10 years ago

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I think you have something here dlog.

In the article (http://www.lightreading.com/mobile/mobile-security/small-cells-exposed!-securing-the-mini-rans/d/d-id/706759) "Mudoi says that's because the operators aren't yet ready to think about it (small cell deployment)." In the article (http://www.lightreading.com/cable-video/cable-business-services/meeks-sees-business-boom-at-twc/d/d-id/706839) the following point is made, "...and could spur deployment of small cells as early as late 2014."

So VTSS has all these design wins, but no one is moving on their designs yet because it is not yet known exactly how the rollout will occur. I also think that, as I've said elsewhere, that nothing sells worse than capital equipment in a down market.

I don't think we'll hear anything from Raging Capital, although we could (http://www.prnewswire.com/news-releases/raging-capital-expresses-displeasure-with-mrv-communications-failure-to-address-concerns-raised-by-significant-shareholders-127926233.html) because I don't think they see the delay in getting product to market as something that they could do something about. The market just isn't ready. Hell, for all we know 4G will never happen and the world will go directly to 5G (whatever that is).

So the alternative to watching a small company financially bleeding out while it waits for a market is to sell the products, IP, and talent to someone with deeper pockets and more potential synergies and to do it now.

If I was Raging, this is what I would explore. In fact, I would have had a sale, as a contingency already mapped-out as a "what-if". They can't have just not thought of this. It's the obvious choice at this time.

The worst-case scenario is that VTSS is put up for sale and there are no takers. I do think they probably have to get rid of Fat Andy before the sale. WB might know this and be squeezing for every last drop of blood. Who knows.

I do know that the longer they sit on this, the more value is lost.

Posted by phobos - 10 years ago | Updated 10 years ago

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Gardner has to go- the primary thing that would move the stock ASAP! Even another rumor of investigation by BOD into potential sale of the company would cause some stock activity.

But the ruling body (BOD & Gardner) is content to remain status quo and continue to milk the company for years to come.

Posted by Techinvestor - 10 years ago

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Looks like another "Death Cross" in the making......... I so hate earnings........

Satbob

Posted by Satbob - 10 years ago

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I'm a little nervous at this point.

We've heard nothing. Will Raging Capital do nothing, put forth a plan, or is the share price decline Raging Capital selling off their shares? How difficult would this be after being 10% beneficial owners and having two people on the board?

And I feel like I've been lied to. VTSS put forth this game plan, but they had no idea (or the wrong idea) when it would execute. Well, timing is EVERYTHING, as the move in share price proves. And still...there is no sense of urgency, there never has been.

What's to say that the June quarter rolls around and VTSS is still losing money with 2015 now being the year that will be VTSS' year? Could the same thing happen in 2015? Will there be more dilution or another pound of flesh to Fat Andy to keep the scheme afloat?

The powers that be need to examine a sale of the company before any more shareholder value is lost.

Posted by phobos - 10 years ago

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It will be interesting to see if Raging Capital is reducing it's position in VTSS (A concern).

My biggest concern short-term is what will the holders of the 18.7 mil shares purchased in the late June offering at $ 2.15 do. As the price continues to decline they may add selling pressure to be able to lock in a profit.

Posted by Techinvestor - 10 years ago

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Hey, Director Kenneth H Traub purchased 10,000 shares on 12/10 at $ 2.58/ $ 2.59.

He's already losing money on his investment.

Posted by Techinvestor - 10 years ago

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Well, it indicates that Raging Capital is still on-board.

The hemorrhage of the share price seems to have moderated for the time being.

Posted by phobos - 10 years ago

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Okay, got it. And also in terms of the weakness in China, what gives you the
confidence that you haven’t lost any market share there?

Chris: Well, what we saw is we saw a weakness in particular box at Huawei, one of their
large Carrier Ethernet transport systems. We sell probably four or five different
products into that, including PHYs and crosspoint switches and other things. All
of them came down. So it wasn’t like we got displaced by a particular competitor

That was from the May 7 CC,
Previous quarter our Asian friends were up 30% the following they are down 30%; lets hope our friends aren't simply buying a few copies of our technology and replicating them at home.

Right. I mean, a good example of, I just saw a name two day s ago, I can't even repeat it for y ou, it begins with an
'H', and it's a Chinese meter company, one of the largest in China. They designed in our Caracal switch in one of
their meters. We've never heard of them, we don't know who they are, but they 're going to sell a hell a lot of
meters. And so...

It would be easy to steal from this guy.

peace

Posted by GARIF - 10 years ago

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12/16: Martin Mcdermut (CFO) purchased 19,935 shares at $ 2.45. Well, we still have believers.

Posted by Techinvestor - 10 years ago

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If the CFO is a believer, shouldn't we all be (I must be crazy at this point)?

Posted by phobos - 10 years ago

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Crg has assured us small cell will not exceed 15% of the companies business, is he saying Intellisec and Serval's are not getting the strongest of reception??
Or is his engineering background hurting us all as he often fails quite noticeably to paint rosier pictures. where top ceo's will often walk that fine line and push the edges of explanations, cgr on the other hand often sounds powerless, perplexed in his explanations.

Am I the one that's failing to communicate clearly here??


The beauty of small cells is that they are compact and easily deployed on lamp posts, on the side of buildings, or any physical structure, indoors or outdoors. That also presents a key challenge -- they lack any physical security.

What's more, the fact they are hooked up to all-IP backhaul connections increases their vulnerability to hacking.

"Because of the physical vulnerability and accessibility of public access small cells, many operators will deploy security solutions like IPsec encryption to support their public access small cells," says Heavy Reading analyst Patrick Donegan.

Vitesse Semiconductor Corp. (Nasdaq: VTSS), which builds silicon for small cells, is addressing this issue. Uday Mudoi, the company's VP of product marketing, says the main message to carriers is that Layer 3 IPsec alone won't do the job. It's already popular in the network core, he says, but it's power hungry, processor hungry, and it's harder to scale to a higher speed since it is so processing oriented.

Because of that, a number of carriers including Verizon Wireless , Sprint Corp. (NYSE: S), and AT&T Inc. (NYSE: T), are looking for alternatives, he says. (See Vitesse Targets Small Cells.)

Small cells, he says, need Layer 2 MACsec alongside a standardized encryption process, so they can interoperate with the various other small cells deployed in any given network. It's not as simple as it is on the macro network, however. Adding encryption to small cells can throw off timing in the backhaul by adding extra bytes, which can lead to delays. Mudoi says standards bodies are currently looking at how security mechanisms can coexist with the timing requirement.

Posted by GARIF - 10 years ago

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It does raise a lot of questions. If small cells will be no more than 15% of VTSS' market, then what makes up the other 85%...where do they see this going? Is VTSS' scheme (encrytion and timing) currently vying as thee solution (for adoption as the standard), and the 15% share is if VTSS solution is NOT adopted? Does VTSS' market position have the potential to get a lot better? Whatever is going on, it certainly seems not to be effecting the recent share price. People seem to be done locking in gains from the offering and now seem to be placing bets for the new year. Interesting.

PS

Analyst estimates for the coming (current) year recently went from $3.50 to $4.00 after one analyst upped their opinion from $3.50 to $4.50. The other opinion remains at $3.50.

http://finance.yahoo.com/q/ao?s=VTSS+Analyst+Opinion

Posted by phobos - 10 years ago | Updated 10 years ago

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In answer to the headline of this thread:

http://biz.yahoo.com/e/131224/vtss8-k.html

"Never!"

Posted by phobos - 10 years ago

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This is to make it all nice and legal for the CEO/Board to be able to set the bar ridiculously low regarding goals to attain their bonuses.

Goals are probably CEO has a pulse, is breathing, and has 4 conference calls a year!

Posted by Techinvestor - 10 years ago

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Back above $ 3/ share on good volume ( 438k shares); nice counter-market move to start 2014!

Also presenting at Jan. 15 Needham Growth Conference in NYC.

Posted by Techinvestor - 10 years ago

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Wow! Somebody just found their checkbook.

http://finance.yahoo.com/q?s=VTSS

Posted by phobos - 10 years ago

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OK, the guy with the checkbook just went to lunch. Will the upward rise resume when he returns between 2 and 4, or are we done for the day?

Posted by phobos - 10 years ago

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