As one of the "old-timers" on this thread I have viewed the events of
the last few days with mixed emotions. I guess I'm happy that people
are waking up to the underlying value in Seeq and that it seems to be
receiving the interest it deserves. But then I'm sad that I have to
wade through 50+ posts a day, many of which are banale and sometimes
insulting. I'm happy that the stock price is moving upwards. But
I'm sad that the movement may be based on hype and short-term
speculation - it could therefore move down as quickly, and once again
taint SEEQ with negative sentiment.
Overall I've been pleased to read some intelligent and constructive
posts - from a mixture of the oldies and some of the fresh blood that
has arrived here - but am depressed at the levels of verbal diahorea
shown by some of the "contributors" (a somewhat inappropriate use of
this word given it implies ADDING something. Can those making SO
MANY posts in a day really have so much to say ?)
Anyway, to add something to recent events -
It does seem as if something is up on the corporate finance level.
(Just deduction from what I've read in some of the credible posts).
If true, then this would likely be happening for one of two reasons
- either the need to raise cash, or because of some M&A activity
(merger/acquisition).
Prior to the last week, there was a rumour that's SEEQ's aquisition
was imminent at a price of $3.25 (posted here about 3 weeks ago).
This was only a rumour, but it has suprised me how the recent
movements interact with the $3.25 level. It is not unheard of in
M&A situations for the price to be manipulated by the negotiating
parties, or for insiders to profit from the movements around an
already agreed price.
This is of course speculation, but Seeq would be an attractive
takeover. It is technically proficient, has good products, has a
poor recent commercial record, and is "cheap" as a consequence.
There have been questions about Cisco being a suitor, but I think a
more likely candidate could be Intel. They are integrating more
and more functionality into the PC "core logic", don't yet have any
networking competance to speak of and have masses of spare fab/cash.
(SEEQ are fabless, so there's no duplication here). This would be
another sensible strategic move in the "PC on a chip" race
needed to fuel growth in cost sensitive application areas - NetPCs,
the home, etc. Intel's recent purchase of Chips & Technology
(graphics), and Nat Semis' purchase of Cyrix (in this case a
rounded core-logic & I/O company buying processor expertise) are
other recent examples of the consolidation that is going on.
This is of course speculation, and it could be that Seeq, who have
good technology, have finally got a real opportunity to become truly
profitable. They have been progressively strengthening their
management in areas of sales and marketing (where they have
historically been weak), and it may simply be that they are at last
poised to profitably exploit their technology. If so, the SB
interactions may just be to provide cash to realise the opportunity.
This is all guesswork, and the only truth (and even then it's a
subjective truth) is that SEEQ has more value than was shown in it's
stock price at $1.50 - $2. However, until we get some hard facts
about what is currently going on, it's impossible to predict whether
it yet deserves to go significantly higher. I guess any further
interaction with $3.25 might tell us a little more.
If this does become a takeover, then this will be my fourth in
three months amongst the ten stocks I'm long on. I've done
reasonably well in each case, but I still find it quite scary -
particularly as at least one more is in the same boat. Half my
portfolio could have disappeared in a 5 months period.......
However, in the three so far there has been absolutely no rumours
beforehand (well not immediately beforehand anyway). This either
means that this isn't what is happening here, or someone's been
very sloppy - and there could therefore be consequences.
Mark
p.s. VLSI aren't really a SEEQ competitor. They are an ASIC (custom
chip) development company who are operating in a number of areas
(including some network products), but lack SEEQ's network chip
expertise. SEEQ's biggest competitor is Level One - who are
profitable, have a much higher market profile, and silly P/E. I
wonder what might happen to Level One if Intel do buy SEEQ ? |
