Michael - let's take a closer look at COBT.
Prior to its November 1999 IPO, COBT stated "On Oct 1, Cobalt Networks had sold about 17,000 server appliances to more than 1,200 customers in 65 countries. The software packages range in price from $999 to $1,899."
However, they recorded revenues of $3.5M in 1998 and $13.8M for the first 3 quarters of 1999, so the sales must have been mostly at the low end of that range, since 17,000 servers at $999 is more money than they actually made.
By the way, they have never made a profit, as far as I can tell. So whatever their claimed gross margins, the net is negative. In the most recent earnings CC, they stated GM was up to 47% from 44% in 1Q and that they intended to go to 50% GM. But they lost $6.2M on sales of $16.2M.
ASP was $1500, indicating sales of about 10,000 units. They have been in business for nearly 3 years, and they are selling 3,300 units a MONTH?
Their stock price has of course reflected decreasing confidence in their business - going from their high of 162 to 57 today. Prior to the runup on the SUNW announcement, they had been in the low 40s.
I'm struggling - this is an area of the market that I know fairly well, and I never saw COBT as a strong player.
I'm still disappointed that Sun did not bring out their own SPARC Solaris based product - it would have been so easy and so much stronger. |
