gizmo, I did not mention NSIL primarily because the parent company FIBR has had a long and enduring history of disappointing its stockholders, quarters after quarters, years after years. As well, of the 5.2M offering, FIBR is selling 2M shares, certainly not a reflection of the parent company's confidence in the spinoff. You also have to wonder why so many UWs dropped the deal after initially agreeing to lead the underwriting effort.
Revenues and eps sound fine, but there are just too many questions remain unanswered in this issue.
From Briefing:
NETsilicon Inc (NSIL) : The next IPO scheduled to go out the door this week is Waltham, MA-based, NETsilicon Inc, a
manufacturer of chips and software for the networking of embedded systems. NSIL's primary customers are manufacturers
of imaging equipment such as printers, scanners, fax machines, copiers. Majority of company's sales derived through
Japanese OEM partners such as Ricoh Electronics and Minolta Corp, giving NSIL a higher-than-average currency
exposure. The company is being spun-off from networking products concern Osicom Technologies (FIBR 9 3/16 +3/16),
which purchased NSIL in 1996 for just $5 mln. Assuming the IPO prices at the middle of the $8-$10 range, Osicom's stake
would now have a value of $90 mln... For the six months ended July 31, NSIL logged revenue of $13.3 mln, up 148% over
the yr-ago period. The company has posted a modest profit in each of the past two quarters, totaling $323,000 or $0.03 a
share... The Deal: NETsilicon has gone through a revolving door of underwriters since the deal was first registered with
the SEC in early-1998. First, there was Dain Rauscher, then Tucker Anthony. CIBC World Markets has now taken over
lead, with US Bancorp Piper Jaffray co-managing... A surge in top-line growth and rally in chip stocks has allowed
company to increase the number of shares sold in the IPO to 5 mln, from less than 3 mln. Majority of the additional shares
being added by parent Osicom, which is now planning to sell 2 mln shares into the IPO... Stock Outlook: Over the past year, semiconductor IPOs have not been huge first-day winners, but have posted respectable double-digit gains. Post-IPO, the stocks have experienced a period of consolidation, before finding their legs. See charts of Maker Communications (MAKR) and MIPS Technologies (MIPS) for examples of moves. Should be noted while MAKR and MIPS were taken public by top-flight underwriting firms, NSIL is being led by sub-1st-tier CIBC World Markets. Given price action in recent chip IPOs, NSIL most attractive to us as a double-bottom play, as it is highly unlikely that stock will be able to hold initial gains. |
