Amati - MAIN THREAD Message Board

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Technology Stocks : Amati - MAIN THREAD

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From: Andrew Won	6/6/1996 2:14:00 AM
	of 700

As I previously mentioned, I do not think one can just assume that Amati is going to be entitled to patent royalties from everyone who makes a DMT modem. You have to look at the patents they have and compare them with other DMT patents that may be held by others before you can make that determination. Even if Amati's patent position is strong, you have to also consider whether Amati will have to resources to commit to patent infringement lawsuits (very expensive) to protect their patent positions. Don't get me wrong, I am an Amati shareholder and I want the stock to do well, but I wonder whether a small company that has already burned through its IPO money and has not yet shipped a large quantity of product is in a position to fund this sort of litigation. Being a tech lawyer, I do not think Amati will be able to go it alone. To have credibility with the RBOCs and to avoid expensive late round financings that carry high interest and require costly preferred stock warrants, I think Amati will have to be acquired by a larger company. The sticking point here is the high price of Amati's stock and whether a merger partner would pay that, let alone a premium over that price. Just my humble thoughts.

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