The lawsuit doesn't matter- ignore it.
By the time they resolve it, Nuko will have sunk or swum on its on. Lets keep the focus on the important things, customers, sales, proprietary or competitive technology, and the competitors. And the current stock market capitalization.
I see the following as strong points;
Customer base: Cisco, Nortel, Oracle, Sony, etc. These guys must see something of value to them here to spend time and effort on Nuko.
Growth market: Everybody seems to agree that this market will take off as the ATM networks grow.
Low stock valuation: Several factors not critical to the ultimate success/failure of this company have helped push stock price down. These include margin calls exasperated by the drop below 5 and 4, levels below which most brokers won't permit borrowing on margin; previous employee selling; poor technical chart; etc. None of this has much to do with the fundamental value of the company.
The biggest weak points are:
Weakened proprietary position: The recent post on MPEG LA worries me a bit. It seems that there is a lot of attention being paid to coding/compression technology, and how are we to know Nuko will have the best? OTOH I didn't see any of Nuko's competitors in this group either.
Competitors: From what I know from the posts on this thread, there are only two companies that seem to be competitors right now; Divicom and Vela Research. There seems to be some confusion about other potential competitors (Alcatel?). If someone with more technical savy than me could summarize the competitors briefly in a single post, that would help.
Technical change: We are moving toward a single chip solution to MPEG2, and if that is the case, I'm not sure there is a place for a stand-alone company like Nuko. Is it possible that the coding/compression technolgy developed by Nuko will be incorporated into the chip design eventually? This is a longer term (1998-1999+) problem, but worries me a bit nonetheless.
Low capital: Nuko seems to barely have enough to survive for 8 months. But if we get the revenue ramp projected by Peter Smith, and which I essentially agree with (except I think we might see $6M in the 2nd Q), this won't kill the company. If the outlook dims due to weakened proprietary advantage, competitor advances, and technical changes, then lack of capital will kill.
Summary:
Even though the weak points are serious, and something I'd like to understand better, at this point Nuko does have equipment ready NOW that does the job. So at this time the strengths outweigh the future dangers of the weak points in doing the risk/reward calculation for me. The lawsuits aren't even in my radar screen as an important factor.
This is quite a speculative stock though.
Paul |
