dwj, thanks for your great review of WSTL's history.
I realize the idea an alliance or large order commitment, by one of WSTL's large customers is a stretch, but the idea of a significant, lets say onetime, reduction in price, as a hook for the order commitment, could work. The idea would be that the loss in profits per unit, could be offset by size of the order and increases manufacturing efficiencies. Margins would fall, but cash flow and profits would rise. Also because of the commitment, of a large deal, WSTL could get access to more funding to hold them over.
The risk would be for WSTL to over project the productivity gains of the upgraded production out put, while still in the process of the upgrade. However funds from early orders on a phased in large order deal, would increase cash flow, and the likely hood of further bank financing, which would get WSTL through, to times of more demand from many customers.
The new increase in manufacturing productivity would increase margins on the new orders down the road, which would offset the lower margins on the original large catalyst deal order.
One of the analysts to comment recently, saw no catalyst to move the stock. But there are those co.s that adjust to change, and in so doing create opportunities for themselves, where others can't see the possibilities that exist.
A change in forward order commitments, would change how investors view the stock, and which could translate to a higher share price.
Some on the other boards, thought WSTL's latest networking product announcement, was just another product announcement. But to me I was happy to see WSTL creating products that meet the current demand for networked access by multiple devices, in ones home or office, over a single copper line. I wish I personally had access to ADSL, and equipment that could handle all the devices and the demand for simultaneous use in our house, that is inadequately met by two lines.
Question, what do you know about how well ADSL systems interface with Ethernet and or optical systems? Hasn't Extreme Networks made in roads in this area. I assume the digital aspect of ADSL helps its ability to interface. I would guess, the useful life for ADSL should extend for five to ten years anyway, as the roll out of an all optical system will take a long time, especially in certain areas. |
