<font color=green>Bizarre Lexar IPO filing</font>
Ron,
That was an awesome find!
Lexar's latest SEC filing seems bizarre to me. I have never seen such a submission before. I sounds kind of like "we're covering our asses" because we said too much on the IPO day.
I think this statement is peculiar...
"Reimer said Sandisk attempted to buy Lexar a few times already to gain access to its technology." While this statement regarding the attempted acquisition is true, we are not in a position to know Sandisk's motivation.
To begin, between 1996 and 1998 I believe that the current owners of Simple Technology owned and funded the operations of what is now Lexar Media.
Message 13369885
In 1998 SanDisk also filed suit against Lexar regarding their controllers. Funny that Simple Technology no longer uses Lexar Media controllers. It is hard to believe they would just walk away from Lexar if it truly was a ripe acquisition target.
Is it possible that SanDisk tried to purchase Lexar Media when it was still controlled by the Simple Technology founders? Or perhaps SanDisk tried to purchase Lexar Media subsequently (subsequent to Simple Technology's divestiture) in order to avoid a protracted legal battle that Reimer threatened to wage? But why would Simple divorced itself of Lexar if the controller technology is that valuable? I find that peculiar.
I suspect that SanDisk tried to co-license the Lexar controller technology in return for the licensure of SanDisk's CF assembly patents. But rather than negotiate a licensing agreement perhaps Lexar chose to challenge the SanDisk IP. SanDisk subsequently did a co-licensing deal regarding CompactFlash with SSTI who also sported a flash controller with CF write times in excess of 1 MB/sec (I believe it was about 1.4MB/sec) in 1998. Thus, at that juncture, Lexar's technological advantage may have lost some of its street value (and SNDK was no longer interested in purchasing the technology outright).
I suspect there may have been a time when SanDisk tried to acquire the basic content of the Cirrus Logic IP along with Lexar's enhancements. According to Lexar this happened on several occasions. However, recall that SanDisk is a flash memory design house, not a controller design house. For example, the purchase of INVOX (which Steve mentioned) was spurred by the fundamental MLC technology, not controller technology.
SanDisk has subsequently spent some R&D dollars beefing up its controller technology. If you look at the MMC specs you will see that SanDisk is not too shabby in its controller designs. Also, I doubt that the write speeds are anywhere near 100KB/sec as Steve suggested. SanDisk may remain quiet about these specs because...
a) there may still be a mixture of older and newer controllers on store shelves,
b) the SanDisk CF write speeds may not be leading the industry and they have no need to highlight this,
c) current digital camera designs don't depend critically on these write speeds for most consumer-oriented models.
In any case, Lexar, for whatever reason, has chose a path of litigation over negotiation. The simple fact that they are redesigning their CompactFlash assembly is, for all practical purposes, an admission of guilt and a direct result of the SanDisk legal victory this Spring. Whether or not SanDisk tried to purchase Lexar at one point is no longer releveant. And to state rather nebulously that the redesign will be complete by the end of the trial litigation is absurd. These court cases seem to have the potential to drag on forever.
All IMHO.
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