Actually I think there are good things about both comments. Michael correctly points out that, thought they have CASH, it is the burn rate that is one important piece of the pie.
Yes, if they could have raised more cash while they had the opportunity it would have been better, but likewise if I would have sold all my tech stocks at the top I would have been better off.
I am encouraged that R&D is still being funded aggressively. Many years ago, Ford fired most of its design engineers during one downturn, and could not compete with GM for decades.
I have a theory, given this context: telecom capital investment, especially as we knew it, will not return any time soon. Telcos will spend what they HAVE TO and what they believe will make them competitive. The industry will consolidate.
R&D can generate new "have-to-have" products that can garner market share. VTSS is investing to create demand.
So, we are watching a race. Outcome unknown.
Will the company develop new products, new markets, and thus new earnings? Or will the slow, slow return to telco cap spending last longer than CASH?
I have respected this management for years, since I nibbled my way into VTSS in 97. Think I'll risk holding what I have and buy more as it probably goes lower over the summer.
It's only money. ;-> |
