It doesn't look like AMCC will approach $16 any time in the near future. This is my estimate using the new estimates for 2016 (what's left of it) and 2017. The total is now $12M less than before the earnings call. And now 2017 seems to be the year. Zepf needs to call "B*llsh*t!" and get this pig sold. It should be able sell for about $8.50 by mid 2017. Otherwise Gopi and company will just be riding the gravy train in my humble opinion. Let's get it done! Please, no more "lumpy earnings", "softness in China", or any more excuses.
In all fairness, this is the current trend. It could take an upward spike when the new products start selling (Helix, X-Gene 1, 2, 3, PAM4, etc.), but right now this is definitely not as initially projected. The longer this takes, the less it is worth considering the time-value of money.
Wow, sold before June at $11 per share...that would be absolutely phenomenal! However, who would be willing to pay $11 per share, or ~$850mln net of the cash on the B/S for something that is doing maybe $1-3mln in revenues (Xgene) this year? Surely the strategic value is there, that is why a buyer would be interested. Not the telco lines and other base businesses. Maybe the ramp is great, maybe it really is...but if that is the case, why would management sell? Seems like management would want to sell towards the top of the adoption S-curve, not at the base? Therefore, X-gene taking off and a strategic sale are actually the same bets. Lots of synergies to strip out though, management keeps being awarded options and stock awards....non-GAAP of course. And the BOD, they appreciate their annual allotment as well....why sell?
Post by christopher on Feb 5, 2016 13:17:32 GMT -5
There has not been much time difference from when we were looking very rich until now we are looking mighty poor! All in my own view
I believe the only way a higher price would occur would be if a bid war began.
What TWO companies must have AMCC?
by the way, I stated $11 share because that is the lowest price that I would be satisfied with.( come on bid war!!)
Also, you must remember Christopher Zepf of Kingdom Ridge is on the board and he is also watching what management has up their sleeves, so I would have to believe that he has shareholder appreciation at the top of his list. Along with a sale at a time that brings the most revenue for the share holder. Zepf is one of the top shareholders
Last Edit: Feb 5, 2016 13:29:08 GMT -5 by christopher
I think it took Billy Martin maybe 3 earnings calls of "softness in China" before VTSS was sold. Boom!
Xgene - Zepf (what Chris said) is going to make sure this is dealt with in such a way as to maximize shareholder value: he's a shareholder. As the time horizon lengthens the time value of money plays an ever-greater role. Also, nothing ages faster than technology. If there is a "s-curve", then where is it?