Andrew,
I agree with you that Whitmore's post was one of the weakest I've seen on SI in some time. Here's another telling excerpt:
>>I am fully aware that the merits of the Fibre Hub are losing favor to the Fibre Switch in some applications
This is really the key to the entire investment picture. Brocade and Ancor, switch companies, are taking market share as fast as they can from the hub vendors, Vixel and Gadzoox. Ancor's low-end switch is replacing Vixel's low-end hub at Sun. Gadzoox may stand a chance - they have a new, 24 port switch, and their hubs are high end managed hubs, which may be able to hold off BRCD and ANCR long enough to get their switch in the market. However, most of the major OEMs have already signed up with the two switch companies. Vixel, on the other hand, offers low end, unmanaged hubs and a low-end, 8 port switch. 90% of Vixel sales come from sales of low end hubs, according to their S-1. The market is moving to switches like a freight train, and Vixel is standing on the tracks.
-Mark K.
Oh, by the way, this point also needs some clarification:
>>Vixel however has 22.2M shares outstanding and a float of ONLY 4.3M shares. Read the numbers and weep!
This, of course, is only true until the lock-up expires, 180 days from the IPO.
Again, from the S-1:
"Upon expiration of the lock-up agreements, 180 days after the effective date of the prospectus, approximately 16,225,486 shares that will not then be subject to any repurchase option will be eligible for immediate sale".
Insiders own 38% of shares outstanding. The rest, 13 million shares, will "float". |
