Good Broadcom article by Steve Harmon...
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Faster Bandwidth Chips:
Broadcom Stock Offer May Zoom
It's always the last mile that's the hardest. With the Internet, that
represents the bottleneck of the existing telephone networks that max
out at 56.6 kbps on a good day, and the limited cable Internet wires
that only reach small pockets of the U.S. and globe at a few megs per
second. Don't hold your breath, but here comes warp speed.
Broadcom wants to be at the center of this fatter bandwidth "webtopia"
that many believe may be just around the corner. It makes silicon chips for cable modems, set top boxes, and xDSL devices, anything
that moves data at the ever voracious PCs at interactive TV speeds.
The Irvine, CA-based firm wants to sell its story and 3.5 million shares of class A common on Wall Street at a target share price of $11. Our number crunching shows BRCM may be after a $660 million
market capitalization, about 18x 1997 revenue with losses. We estimate
going forward this may be 9x 1998 revenue or about 60x estimated arnings.
On the plus side, fourth-quarter revenue reached $17.3 million and $2.47 net income, as high-speed demand starts to emerge.
See table, "A Screaming IPO On Its Way?" at
internetnews.com
Broadcom's five primary product lines encompass: high-speed
communications and MPEG video/audio devices for the cable television
set-top box market; high-speed data transmission and media access
control devices for the cable modem market; 10/100Base-T Ethernet
transceivers and repeater controllers for the high-speed networking
market; receivers and MPEG video/audio devices for the DBS (satellite)
and terrestrial wireless markets; and broadband twisted pair
transceivers for the xDSL market. Translation: Faster Internet speeds
via silicon of various flavors through many mediums.
Broadcom's customers include an array of set top and cable modem makers including General Instrument, and 3Com, and others including Cisco, Bay Networks, Motorola, and Scientific-Atlanta. 3Com alone accounted for more than half of Broadcom's revenue in 1997. |
