Yup, despite all the fancy technical acronyms, a classic commodity business.
Since Kopin didn’t invent HBTs, they never had any lasting, defendable barrier to competition, only temporary performance advantages based on marginal improvements in materials, etc. They didn’t have, and never developed, the intellectual property position needed to push their HBT wafer business beyond the commodity mode into a higher value-added mode. Their research program in this area should have been broader, perhaps having less focus on materials and more on devices.
Even so, John Fan should have recognized earlier that this was a commodity business and managed it accordingly. However, being a close friend (and neighbor) of Mike Dukakis, the decision-making from early on has been influenced by politics, e.g. the locating of both facilities, Taunton and Westborough, based on state loans and subsidies. It seems that he almost runs the company as a non-profit, for the sole purpose of providing lifetime employment and non-performance-based “rewards” for himself and his management buddies. Certainly his mind-set must have been distorted by exposure to Dukakis during his formative years as a CEO.
The philosophy has generally been to play it safe, hoard the cash, and muddle along near break-even. That would be his prerogative if it were a private company, but not when that cash is paid-in capital from public stock offerings.
And I see that we now have ANOTHER FAN on board with a generous restricted stock package; and no, I don’t believe he’s not related. Arrgh! |
