[Stock action]
Dave,
I agree that there's something more than a down market and margin selling affecting Amati. I've called the company and they're as baffled as I am. I asked them straight out if there's anything negative that could be hurting the stock and they said, no, absolutely not. I do know there are lots of rumors floating around. One says GTE is getting the Westell ADSL contract. Another says Motorola and ADI are screwing Amati out of royalties. Another says USRX will circumvent our patents. I don't know how rumors get started, but I do know it's insane. Absolutely insane.
ú GTE --- I spoke with their public service director and, no, they are not making their ADSL plans public at this time. There is no substance whatsoever to the rumor that says Westell is getting a large contract.
ú USRX --- I spoke with Amati and, yes, USR can buy chips from TI, but, again, no matter what they charge, Amati gets the agreed-upon amount. If TI wants to lose on the deal by selling them at a discount (the rumor), that's their privilege.
ú MOT - Same as with TI. If they sell CG at a discount, they still have to pay Amati the agreed fees. However, once they've bought the chip --- in this case an inflexible non-upgradeable model --- and they want a more powerful, versatile, product, they have to re-negotiate with Amati. Even Motorola will have to re-write its agreement. It's like buying a car with two gears --- forward and back. If you want to drive in second, third, fourth, and fifth, you have to pay the boss. In this case, Amati.
ú ADI - Still in discussions on licensing. If they proceed to sell ANSI-compliant chips without paying royalties, Amati will inform whoever is buying that the patents have been infringed and action will be taken. ADI's CEO is ruthless and certainly doesn't have to worry about winning any Nobel prizes on humanitarian grounds.
ú AMTX --- I asked about the status of the promised partnerships and was told, "They're in the works. . . they're taking longer than we expected. . . there are others we're working on, too." I've heard from the analysts that they're close. . . that one is being held up on a technicality. . . that another could come out as early as this week. . . and I've respond as politely as I can, "I'll believe it when I see it." I don't doubt they're coming, I just don't like being disappointed. Sneak up behind me with the ring, okay???
If all this rumor-mongering is "posturing," as I'm told it is, then I have to wonder what it will be like when the gloves are off. Incidentally, is Westell behind all these leaks? And is it coincidental that they're beginning with the change-over in management? I may be na‹ve, but I'm starting to understand what Grove meant when he talked about paranoia.
Hey, I'm willing to be wrong. Tell me I'm over-reacting. I'm trying hard to understand what just doesn't make sense.
Regards,
Pat
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