Carl Russo + analysts phone conversations (I posted to Yahoo as well)
This news is very positive for XIRC. Read details below.
Carl:
1. Good business, interested in increasing shareholder value and
for next while will be via products
2. MOST IMPORTANT thing I think -- computer system to track inventory, sales, etc (ie. management info) been in place
during the quarter and working very well -- info available in a timely manner. Previously was not. This is a BIG improvement in an industry since having the data allows a firm to make decisions with good data.
3. XIRC focusing on mobile user vs. 3com does a bit of everything. Old management who left the firm (Netwave) focusing on, in terms of mobility, mobility within a building vs. XIRC focusing on mobility outside a building. Which mobility market do you think is larger? Sarcasm (mine)
4. 3com and all their announcements -- 3com is a larger co. and spends more in absolute $. XIRC markets mostly to corporate marketplace (vs consumers), but 3com is also a public relations machine (but remember, 3com is competing with Cisco in the network market -- who do you think will win that one?
5. 3com made big announcement about new modem V.90 std interoperability ok and ready to ship. XIRC holding back releasing V.90 inter-operability to work the bugs out AND XIRC has heard that inter-operability isn't all it's cracked up to be.
My note: 3com will incur expenses and poor customer satisfaction
in such a case. Also, V.90 operability is not going to have much of an effect on April reporting (definitely not for 3com since it just reported)
6. XIRC, along with others, was part of V.90 stds cmmttee and is quite aware of what they're doing.
7. XIRC #1 award from industry since XIRC introduces products 6-9 months ahead of 3com and others.
8. XIRC new product - full announcement on Monday - felt that it's known, but not by everyone. XIRC will be able to confirm/add to the article. New product very positive. See popatop34's message where Carl said to watch for surprises!
9. Carl indicated Tucker Anthony had just upgraded XIRC.
No news flash could I find, so phoned around to the analysts.
Story made Dow Jones wire at 3pm (still haven't found this), but has been confirmed from the source. Judging by today's volume, this info probably known beforehand (a negative). As a positive, analysts are 'taking another look.' <-- my phrase
Analysts:
1. Xirc sells to PC makers, etc typically. Now they're selling to OEMs -- read article on Europe. How/who at Xirc makes the sales? They have their own salesforce + INTEL's sales force!!
This is has only been happening this quarter and is a result, of course, of Intel's ownership stake in Xirc (and for Intel I'm sure they can configure their chips to Xirc's modem vs. having to configure for many co's modems Intc has a 'std').
So, the benefits:
(a) new market (OEM) and it's expected to be about 15-20%
of sales
(b) additional salesforce (Intel) with heavy clout
uh oh, an additonal expense, right? NO. XIRC
does NOT pay any fee to Intel for help in sales -
my guess is it's treated as a very good referral and
they're both there making the sale.
ie. no additional sales & admin expense, but extra revenue.
2. Xirc probs with Asia? Share price valuation model has reduced these sales. But, European sales are strong.
Xirc meet their earnings? -- you bet. Valuation model shows $17.
3. Inventory/channel stuffing (which 3com got burned on and Xirc did a long while back) -- with new information systems, info available to track sales very quickly and system is tied into co's xirc does business with. In addition, sales bonus is now based on actual paid for / shipped sales vs sales of product sitting in inventory. ie. salesforce incented only for actual sales. And I just realized the accounting effect - better matching - is there as well.
So, in all, very positive. Someone keps buying the calls with strike of 15 - this is bullish. |
