John,
I got out of PAIR last winter when I saw that their management was too stuck on themselves to seek out strategic partnerships. Without a fully integrated ADSL system, PAIR will never be a big player in the ADSL arena.
But the bigger question is whether ADSL itself will ever be a big player. As you recall, I predicted that the copper infrastructure, with its quagmire of load coils, DC circuits, T1 repeaters, and cable stubs that interweave wire gauges and binder groups, would present a formidable obstacle to rapid deployment. It took nearly 100 years to build and evolve the copper cable infrastructure.......rebuilding it to accommodate ADSL is not going to occur overnight. The TELCO's slowness in deploying ADSL seems to verify those concerns.
PAIR's price merely reflects the attitude throughout the sector that ADSL may not be the goose which lays the golden eggs. In fact, PAIR may have fallen harder from great expectations due to their success in HDSL. Throw in the current disaffection with tech stocks in gneral and you now have pair at $7 1/2 a share. There shouldn't be much more downside since its market cap is now only about 2X cash and P/E is around 11. Bottom should be about $6.50.
Is HDSL still relevent? For PAIR it is, since it provides most of their revenue. Advent of HDSL2 will provide uncertainty, however, since its committee design is a platform available to all manufacturers...bottom line will be the bottom line...cheapest supplier wins...price cutting brutal, profit margins thin or non-existent until shallower pockets are driven from the scene.
Altho there is some talk of takeover by Alcatel, I believe there are better opportunities out there, which brings me to another topic....
ASYT
Andrew Vance, IYO, where is ASYT going to bottom? Is this a good time to add more shares (Currently $9 1/2), or will I be able to pick it up for that price the rest this year?
Regards,
Knip |
