Dave:
I agree that it was surprising that Redback did not merge with a stronger, complementary player, like Juniper or ONI. I could have even imagined some sort of split, with part of the company (SMS) going to one acquirer, and the other part going to another (SmartEdge).
That being said, they indicated that they were hiring a new CEO in two weeks, and given the poison pill amendments adopted, they seem serious about sticking it out.
In terms of cash burn, they seem to be expecting a drastic reduction for the next few quarters. I'll have to sniff the numbers out myself, as there are conflicting reports.
I sold most of my stake in the 150s, but I still have some shares. Not sure what the catalyst will be to move RBAK upward, as selling to the telecom service providers in the near term is going to be terrible, which means not only lower unit sales, but pricing pressure from competitors like Nortel and Lucent who are just desperate to sell.
It has been surprising that absent the Alcatel-Lucent proposal, there has been no real consolidation yet in the industry. |
