Spoke to Dr. Shanks:
Greetings everyone. I finally took a little time to give LGPT a call and check up on progress. The following is a synopsis:
Good news:
LGPT's Les Pickett has been working w/Smartsand and has proven models of the hardware. Not everything is complete but work continues. I think enough is proven that IP can be sold and made into a product. In this direction LGPT has developed a marketing presentation and will be hitting the various trade shows to show off their products.
The company appeared in MSFTs Windows CE newsletter which has generated quite a lot of interest in the software products. They are signing more beta customers and expect additional paying customers.
LGPT has bought back over 100,000 shares so far. We may hear a specific report on this in the near future.
The Form 10 should be filed soon. This is important because it is a big step on the way to full reporting and it opens the door for investment dollars to come to the company.
Challenges:
Like every small startup company, the issue is money. LGPT fortunately is basically an IP company so the company doesn't need fifty million dollars to get going like many small capital intensive companies do. But they do need money to get actual hardware made from their work with Smartsand. They are working on several ideas and with the filing of the Form 10, will be in line to get some more external money.
The Future:
LGPT is convinced its technology will generate and be involved in generating lots 'o lots of dollars in sales in the very long term. The ambitious vision has been outlined earlier on this thread - world fp domination. The big fish are definitely aware of them and are also aware that fp capability is becoming more and more important. I see at least two successful paths the company could follow:
1. The longer and ultimately more difficult but perhaps more enriching is to generate your own hardware parts, and manage your IP licensing etc. with many many companies and generate lots of revenue with high margins as we have long discussed. This path has lots of difficulties and challenges especially in getting started and in business management but also promises the greatest rewards. However, given the start up nature of things it seems quite reasonable to assume that it will take a significant while yet before big revenues appear on LGPT's quarterly statements.
2. LGPT could be bought out for its technology. Assuming LGPT's IP is everything we believe it is, how much do you think something like this would be worth to a processor company like Intel? If they were suddenly able to do fp faster than anyone else on less silicon, it would have a significant market impact. Surely we would have to think in terms of hundreds of millions of dollars of revenue impact for such a company, long term even more. LGPT has already had suitors interested in buying the company/technology but obviously not with enough $$$ to turn management's head.
My opinion is that it seems likely that the second will ultimately be the path LGPT will go. LGPT's IP has much more value to the processing world than LGPT will be able to recognize for a very long time because of resources. Instead of trying to manage all the IP concerns, develop lots of products, and manage them all, common sense says it will ultimately prove easier to wait for the big fish to get hungry enough, start a good bidding war for the technology, and then sell it. These big players will never be afraid of LGPT's hardware so LGPT will have to get them afraid that their competitors will get a lock on the technology. Then you need to make sure you have good lawyers and get the best deal possible.
It seems to me that the company is progressing down both paths listed above right now. Who knows how it will turn out, but everyone seems to becoming convinced the IP is valuable. The question will become 'How valuable.' Floating point is becoming more and more important every day as the digital revolution continues. Sit back, be patient and enjoy the show.
Mark Nispel
Software Engineer |
