Any inputs on this spin off of SGI?
I hear that many times spin offs are treated like yesterdays left-overs: I.E. ignored. This could be a mis-understood company with much upside.
Here's a recent news article on the IPO--
Wednesday July 1 3:30 PM EDT
MIPS blips downward after initial offering
By Craig Bicknell
SAN FRANCISCO (Wired) - Shares of chipmaker MIPS Technologies -- a former unit of Silicon Graphics -- slipped below the initial
public offering price on the day of their debut, a bad sign considering the overwhelming investor demand lately for new technology
issues.
MIPS shares were priced at $14 in Tuesday's IPO. When trading began on the Nasdaq, the stock surged to as high as $15.13, an 8
percent climb. But they sputtered by the end of the day to close at $13.44, then edged down to $13 Wednesday.
Analysts said MIPS' failure to go into IPO orbit reveals investors' doubt about the future of its principal product, embedded
graphics chips. The company supplies the principal chip for the Nintendo 64 but has few other marquee customers.
"People are questioning whether MIPS can grow as a standalone company on the back of that market," said Lou Mazzucchelli, an
analyst at Gerard Klauer Mattison & Co.
Silicon Graphics itself has said it plans to wean itself from MIPS microprocessors and use Intel chips in upcoming workstations.
Silicon Graphics hoped that MIPS could go it alone on the strength of contracts with game vendors like Nintendo.
"Silicon Graphics and MIPS were going in opposite directions with their chip strategies," said Mazzucchelli.
MIPS initially filed to sell 6.3 million shares, but scaled back the offering after a tepid response from institutional investors. On
Tuesday, 5.5 million shares were sold through an offering jointly underwritten by Deutsche Bank Securities, BancAmerica
Robertson Stephens, and Hambrecht & Quist.
Proceeds of the sale, about $77 million, will be split between MIPS and former parent company Silicon Graphics.
Silicon Graphics will keep all of the return on the 4.25 million shares it contributed to the offering, leaving MIPS the proceeds on the
other 1.25 million shares. Silicon Graphics still maintains an 84 percent stake in MIPS after the sale.
(Reuters/Wired) |
