Semi:
The concept of a few big players is a knee jerk reaction by all financial analysts. It is true (1or2) in most industries, so they assume it will happen in optics too. They tend to be telecentric in their whole mindset, and yes, I do intend the pun. That, and they all want to be on the train that delivers a GE, a CSCO, a MSFT, INTC, etc. That having been said, it is not moronic speculation, just a bit ignorant.
Fiber is a much more diverse market than semiconductors ever was. And the dynamics are totally different. In semis, the TV and radio were consumer items. Semis go direct to consumers, and thats why that bubble never really ended.
In fiber, there is no direct consumer channel. Its all B2B. So the fiber bubble was not TVs and radios switching from tubes to transistors, it was the Act of 96 and long haul BvsB competition over building by 7X. There is no core of consumer driven demand to fall back on.
Now the speculation is BKHM is going to buy NT optics components group for $50M. NT HPOC is bleeding $150M a year, net of internal transfers of optics components. So add to the $30M per year BKHM is already bleeding, $150M/year. Even with wrap around sales agreements, that would take earnings to about negative $1.80/share, and ultimate bankruptcy for BKHM.
Stupidity reigns supreme.
JMHO
-Own |
