I have a extremely small short position in RSYS, so I am
completely unemotional about it. No, I don't think it will
go to zero, but I do think it is seriously overvalued, even
at 29.
As for quarter over quarter revenues, the numbers I have are $20M,
$22.5M, and $27.5M for the last 3 quarters. These indicate a decent
trend, and if they were
to continue would be good. Having worked at small high-tech
companies, I've seen how easy it is to "manage" revenues and earnings
(quite legitimately, by the way - I have no opinion on the merits
of the current law suit). If a company doesn't have a plan to show
good growth after an IPO or major aquisition, they are really
incompetent.
On the "unqualified opinion" press release, I was somewhat
supprised at the misleading discusion here. Almost every company
gets an "unqualified opinion" on the financials from the accountants, so
the only unusual event would have been a "qualified opinion" which
usually indicates something really wrong. Again, I have no facts
or opinion on the lawsuit and my tiny short position has nothing
to do with this issue.
My main problem with Radisys is the core business - VME-based
embedded systems - is not that exciting. Overall it is a
slow- or negative- growth business, and the best RSYS can do it
is to grow market share. This is not very exciting. They got a small
one-shot burst of growth by aquiring the major competitor (which
looked like huge growth because of accounting) and I've
made a small bet they can't keep up even the small growth.
Mike |
