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VTSS Investor Forum

Broadcom buys Netlogic

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Here is a link:

http://blogs.barrons.com/techtraderdaily/2011/09/12/netlogic-soars-50-on-broadcom-buy-whither-cavium/?mod=yahoobarrons

BRCM paid a 50% premium over the then current trading price of NETL. It is 8.5 times sales.

So there is a little activity in the industry.

Posted by dlog - 14 years ago

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One thing I am pretty sure of, dlog, no other semi company, especially BRCM, is beating a path to VTSS's door to acquire it. And just for fun let's assume they do, and follow BRCM's example, most of us here are going to get screwed.

G

Posted by G - 14 years ago

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any comments here. I didn't see any mention of $$$ for this deal.

http://finance.yahoo.com/news/Vitesse-and-Aliathon-bw-900219944.html?x=0&.v=1

I will say this. At the last conference call guidance was for product margin to be at one level and "overall margins" to be higher than the product margin. This of course implied there would be some very high margin (100%) IP revenue. Here it is I guess.

So I am inclined to think VTSS just made their numbers for the quarter. (Although it says nothing about how product revenue is going.) If product revenue comes through this could be a first good step in Gardner at least building a little some credibility.

Posted by dlog - 14 years ago | Updated 14 years ago

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i haven't posted in a while cause there was too much toilet bowl talk. vtss owns the patents on FEC at high speeds - and no other corp. has this tech. if they can protect their patents AND continue progress on making the Fkin Excellent Code the industry standard, then this tech is worth upwards of $200MM in my estimation. of course, the industry doesn't want to be bound by a license for hard coded stuff from an upstart like vtss - -but let em try to find another beautiful solution for correcting bit errors in a data stream running at 100G - - this one works and can be dropped into anyone's comm chip core.

AND you won't see vtss sold anytime soon. i estimate the current value at over $350MM and rising.

btw - this post and dlog's should have been under the sale of patents topic - -not the BRCM buys NETL (which in my humble opinion - they overpaid for the wrong equipment vendor - BUT i would settle for 8.5 times current revs in a sale of vtss today !!!).

Posted by daWiley1 - 14 years ago

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do any of you realize that 8 and a half times - -let's say $130MM or so current revs equals - - 8.5 X 130 = 1.105 Billion dollars !!!!!!!!!!!!!

and divided by 35 MM shares - - -is a stock price of $31.57

put that in your comp pipe and smoke it.

is this a ouija board or am i raising my bat and calling my shot???

today - -marching ever onward -- i call VTSS as my highest percentage gain ticker - - as measured one year from today.

So - that is the challenge - -name a ticker that does better than VTSS by September 13, 2012. all can play - - - even former shareholders. and i am not calling the stock to $31.57 in a year - -but that is the trajectory and close to the final result.

I see VTSS as worth $ 10 or so today - -and eventually making it easy to $ 20 - - from there - -my ouija starts to fade.

Stick around - it is gonna be a very interesting year.

And remember to add tickers if you think one will do better than VTSS.

Posted by daWiley1 - 14 years ago

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You can add another collaboration with yet another semiconductor company this week.
First was the deal with Aliathon and today we learn that Vitesse has teamed up with Zarlink.

I spoke with Gardner last week while he was at a meet with investors in Colorado. He stated that the previous week he had been meeting with investors in the Seattle area and that this week he would be doing the same at another location. He was upbeat about expectations but did say that the economy was not helping matters at all.

Posted by christ3opher - 14 years ago

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The "economy not helping matters at all" comment can be translated to "we missed our revenue targets because of the economy."

Kudos to gardner for at least telling us but it sounds like they are bucking a headwind.

Posted by dlog - 14 years ago

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So Gardner was in Seattle meeting with Alex B. Washburn and the Baty boyz of Columbia Pacific Advisors, who own 2,744,128 shares, or 11.2%. AND Mikey Self of Lake Union Capital Management who owns (as of 2/1/2011) 1,905,500 shares, or 7.9%

Don't know who is in Colorado - -but he might be on his way to Minneapolis to see Andy Redleaf and LeRoy Kopp.

Sure don't think CRG will be hitting our site or any of our long suffering shareholders - -who knows maybe an offer on the table ???

btw - -Zarlink, a Canadian corp. listed in Toronto, is rejecting an unsolicited take under from MSCC - -they offered BELOW the current market price and and below the debt holder's make whole amount - -the board rejects and the deal is expected to close on 9/22. Zar has bonds due next year. We all know how that deal can turn out.

Posted by daWiley1 - 14 years ago

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Hi dlog,

I am not sure i would be too quick to say that the economy not helping matters will actually translate to a miss on revenue targets.

At this point in time I believe that Vitesse will be hitting their target for the fourth quarter.

Posted by christ3opher - 14 years ago | Updated 14 years ago

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I would think that Huawei's slow inroad into India would be more of a problem. Aren't Vitesse new products somewhat immune to the economic turmoils? I have seen no slowdown in our lust for electronic gadgets and their new capabilities.

I too agree that if CRG delivers as promised, few if any will outgrow this company in the next year and probably 3 years. When CRG mentioned Ford's CEO, his "FEC" masterpiece was at the tip of his tongue! the "FEC" solution in my opinion is on its way to becoming the STANDARD in the industry.

While big money is waiting for Q4 results, this might be a wise time to buy for dirt...

peace

Posted by GARIF - 14 years ago

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Chris3opher:

I am hopeful that VTSS hits Sept 30 projected numbers of $36-$38 million total revenue (I think that was the range). The economy comments make me concerned about the December 30 and beyond numbers. We have already seen some pushback on the projections. We are now at new product revenue will be 25% of total revenue FOR THE QUARTER REPORTED in September 2012. It used to be something like new product revenue would be 20-25% of total revenue in all of 2012. Parenthetically it always bothers me that there is no baseline established for non-new product revenue. In other words no one has said they expect "old" revenue to grow, contract, or stay the same. I have noticed that in all of this talk of "growth" there is never any comment about whether total revenue will grow or not. That seems a little strange to me. Maybe they are just tired of never achieving those targets and have just decided not to comment externally. I am willing to bet there are total revenue growth rates being addressed in the private meetings in Seattle, Colorado, MPLS and other places.

Posted by dlog - 14 years ago

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Huawei targets enterprise deals at $7 billion by 2012
reuters

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On Wednesday September 14, 2011, 11:48 pm EDT

By Lee Chyen Yee and Huang Yuntao

DALIAN, China/HONG KONG (Reuters) - Huawei Technologies Co Ltd, the world's No.2 network equipment maker, expects its deals in the enterprise sector to total more than $7 billion by next year, banking on demand from key markets such as China, a senior executive said.

Huawei also plans to triple staff numbers at its enterprise unit to about 30,000 in the next three years from 10,000 expected by the end of this year, to compete with the likes of Cisco Systems Inc and Hewlett-Packard Co, with half in research and development.

The enterprise unit provides equipment such as hubs, routers and switches that run networks transferring data across corporations.

Huawei signed contracts worth $2 billion last year and aimed to double that figure to $4 billion this year and $7 billion next year, William Xu, president of Huawei's enterprise business group division, told Reuters in an interview late on Wednesday at the World Economic Forum in the northeastern Chinese port city of Dalian.

The Shenzhen-based company aimed to expand its enterprise business aggressively in coming years, targeting contract sales worth $15-20 billion by 2015, Xu said.

"Cloud computing is a revolution in the IT sector and gives information and communications technology suppliers such as Huawei new opportunities to get into the enterprise sector," the Shenzhen-based executive said.

"Our key clientele used to be network carriers, but we're expanding into vertical markets in various sectors," he said, adding that Huawei would actively target sectors such as energy and transport, in which China is actively investing.

Huawei was restructured this year into three main units - one that supplies equipment to network carriers, another that makes consumer devices such as cell phones and tablet PCs and the third, the enterprise division led by Xu.

In the telecommunications sector, Huawei competes with market leader Ericsson and smaller local rival ZTE Corp in providing infrastructure equipment to network carriers.

Huawei derives its revenue, which totaled 185.2 billion yuan ($28 billion) in 2010, mainly from network equipment sales, but has been actively marketing consumer devices because of growing global demand for smartphones and tablet PCs.

Although Europe, one of its key markets, is embroiled in debt problems, Xu said the crisis had little impact on Huawei's revenue.

"We didn't see reduced spending in the ICT sector as corporates are investing in cloud computing," Xu said. "Some chief information officers, such as those in the financial sector, prefer to spend the same amount, but they are now demanding more for their money, especially since the economic climate is tough."

However, the United States has been a difficult market for Huawei to crack as some politicians are wary of the company's secretive founder and Chief Executive Ren Zhengfei, a former military officer.

But Xu said it was more an issue of familiarity that hampered Huawei from clinching deals in the United States.

"Clients in the North America are not familiar with the Huawei name. In the enterprise sector, many people haven't heard of Huawei, so that is something we have to work on with our partners," he said.

(Additional reporting by Li Ran; Editing by Chris Lewis)

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Posted by GARIF - 14 years ago

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D, Isn't "THAT IS IN THE FOURTH QUARTER" better than by the end of 2012?? i read it as good news!!!!
There was an exodus from Vitesse, thanks to all its problems making the FAB-30 a critical component of this companies future.

My humble latrine observation!!!!!!!!

peace

Posted by GARIF - 14 years ago

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