Hi "Brother,"
I think the company's representitives and Board know very well that they are in a marketplace with much larger players. The last time I heard Pauline describe the situation, she indicated that NPIX was a mere "monkey" compared to the rest of the gorillas. She certainly uses colorful language. One has to wonder just how "colorful" the language was over the last week or so.
Anyway, the meat of your question is directed at "value", and that is extremely difficult to determine right now. After all, first quarter sales were terrible, even with the market expecting a downtick in FDDI revenues. The numbers aren't fully known yet, so there is no quarterly breakdown that could have been given in this conference call although I am sure one will be provided in conjunction with the first quarter report. Accordingly, all we can do is speculate.
However, for the sales to fall in the $ 11.5 - $ 12.5 million range (what was announced Monday evening) versus $ 16.1 million in the fourth quarter, one can only assume that FDDI was not the singular reason for the "slowdown," even if it was the most significant part. Thus, fast ethernet revenues were probably lower as well, even though unit volumes were higher (clearly indicating that average pricing declined in the quarter...though that was expected by *everyone*). It remains to be seen how it plays out.
In any case, I can no longer "guesstimate" the values, as it is not clear what the components are worth. Cash is worth face value, of course, so there is nearly $ 50 million in value there. (This represents approximately $ 4 /share.) I haven't a clue what FDDI sales are running at currently, so I can't provide a guess for the value of that technology and effort. And, as far as fast ethernet is concerned, though I believe that NPIX's products are "solid" and in the top tier insofar as quality, its reasonably tough to place a value on the technology in an environment where virtually every networking stock has declined precipitously in the last two months. Obviously, it would have been "better timing" if the company had been sold in the latter part of last year, but at the time (I was in attendance at Pauline's presentation at the AEA Conference in Monterrey) she made a presentation where she suggested that NPIX's corporate goal was to be at $ 500 million in sales by the Millenium. Oh well.
Anyway, in short, Brother, your guess is as good as mine. The technology is worth less than it used to be because they have sort of missed the market. It does have value, however. It just isn't clear yet what that value is. I guess we will find out soon enough. |
