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Technology Stocks : Vitesse Semiconductor
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To: David Lawrence who wrote (4076)2/22/2002 4:59:54 PM
From: The Ox  Read Replies (1) of 4710
 
Found on another SI thread:

15:53 ET VTSS Vitesse Semi: Moody's places debt under review for possible downgrade (7.44 -0.37)
Moody's placed VTSS under review for possible downgrade, citing the severe retrenchment in capital investment in VTSS's end mkts as well as the co's substantial operating losses.



I was rechecking the last quarterly report today and I understand Moody's concern. Cash burn last quarter was $120Million while revenues were less than $40 Million. Cash balance stands at $550 Million but there's over $400 Million in long term debt on the books. I suppose my greatest concern is that there's only $200 million on the books in property and equipment but there's almost $900 million in "other assets". Almost all of VTSS's equity is sitting in this category called "other assets".

It's no surprise after my latest review that the market is punishing VTSS, especially in light of their "acquisitions" over the past few years. The sector at an all time low for market sentiment, more companies lowering cap-ex spending every day and analyst estimates showing VTSS is going to have negative eps for the next 2 fiscal years.

Their intellectual property aside, things really look lousy for this company at this time.

Must be time to buy<vbg>.
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