GP, I apologize for my emotional responses regarding both Hackworth & Alexy but I do have my reasons. Hopefully I can communicate it to you without so much emotion.
Regarding the rift within the B of D. I agree with your assessment regarding Hackworth and his position. He has most of the control on the board but not all. Tom Kelly was recruited by the board, not Hackworth. In fact James Guzy was the person responsible for hiring Tom Kelly. The board is made up of the original members, Suhas, Hackworth, Guzy, and Smith, and added Rhines in 1995. Smith and Guzy were the ones over ruled by Hackworth, Suhas and Rhines..3 to 2 to push Kelly out and retain Hackworth. Believe me, we do not have a happy board. In fact, I wouldn't be surprised to see either or both Guzy and Smith resign in the near future. As for actual evidence you will have to take what I have said for what it is worth and leave it at that. I already am in hot water. Also when Kelly was brought in Hackworth, regardless what you have read and heard, really took a back seat and concentrated on what he does best.strategic planning. As for your assessment of Hackworths' "superior personal leadership skills" all I can tell you that in a small operation you hit the nail on the head. As for a large ($1B corp) you couldn't be farther from the truth. It was the Hackman that let Bartek ruin the graphics business. It was Hackman that let Kenyon Mei do whatever he wanted in their Personal Systems Div., the very same division that introduced the V.34 chip set when Rockwell was already shipping millions of the V.56. It was Hackman that bought PCSI that never made a profit and lost $25M each year from 1993 - 1997. I guess you could say that they finally made money here when they sold it. I could go on but enough. I also have no clue regarding Teo other then my gut feeling that he invested to make money..anyway he can up to and including orchestrating a buyout.
Indications regarding a buyout are purely speculation on my part. But I will share with you my thinking. Forget for a moment what I said about the Board. But, ask yourself, why in gods green earth does this board let a guy like Kelly go and place the guy that got them to the state of confusion that they hired Kelly to get them out of? Do they think Hackman can actually take them to the $2B level? Hell, Hackworth touted his plan back in 1995 that said Cirrus would be $5B by the millennium! Give me a break. Also, I noticed that we are hearing very little coming from the Mass Storage folks other than flat to lower units shipped. I can't remember a time when it has been so quit. In fact, there was a time when my hero, Dr. Canning was in charge of this division, that Cirrus was looking to break this group away and make it standalone. This is just a BTW statement and probably means more to those folks in the know than yourself.
I don't think the JVs will be any problem in terms of someone acquiring CRUS. The reason is that Cirrus has a capacity contract which means they pay whether or not they use the capacity. As far as I know there is no mention of assignment. I could be wrong but I don't think so. And of course you hit upon the low stock price. How many billion dollar companies can you acquire for around $800M assuming market cap?
Also, Cirrus has lost and is losing more and more talent as we sit here and type. Their headcount is heading south. Their saving grace at the moment is Crystal and Mass Storage. Their new products, for the most part, are coming out of Crystal. It is in my opinion that in order to maintain revenue, Cirrus will either have to close their Austin facility and move it to the bay area, or they will have to make further cuts in Fremont. They simply can not afford to maintain 5 buildings in Fremont.
Well a lot of what I stated is my opinion but a lot of it is fact. I hope I helped.
Calvin Scott |
