Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Wolf speed -- Ignore unavailable to you. Want to Upgrade?

To: Robert Jacobs who wrote (3475)	8/4/2000 12:37:45 PM
From: Pete Mimmack	Read Replies (2) \| Respond to of 10713

Dow Jones report on sale of lock-up shares: Several Wall Street analysts said that the 13% decline in Cree's stock Wednesday may have been due to insider selling following the end of a share lock-up period. A company spokeswoman confirmed the lock-up period related to Cree's acquisition of privately owned Nitres Inc. expired when Cree's fourth-quarter earnings report was issued on July 27. Employees of Cree were permitted to trade Cree stock on Tuesday, while non-employees were permitted to trade Friday, she said. Cree closed its acquisition of Nitres in May, receiving all of Nitres' stock in exchange for 1.5 million Cree shares. Cree also issued about 350,000 unvested shares in exchange for unvested shares of Nitres, and reserved about 150,000 shares for Nitres stock options and warrants assumed by Cree as part of the transaction. The spokeswoman said she had no knowledge of how many shares might have been sold following the end of the lock-up period or whether such selling had hurt Cree's stock price. Both Prudential Securities Inc. analyst Hans Mosesmann and Stephens Inc. associate analyst Holman Harvey cited selling at the end of the lock-up period as the likely cause of the decline. "There could be some (venture capital firms) who have been wanting their payout for a long time," Banc of America Securities LLC analyst Gauna said. "It could just be other sellers in the market." Cree's shares closed at 108 Friday, down from their close Thursday of 112 1/2. The stock recovered to end trading Monday at 112 7/16, but dropped to 104 3/16 on Tuesday and to 90 3/8 on Wednesday. It recently traded at 93 3/8. -Riva Richmond, Dow Jones Newswires; 201-938-5670 ragingbull.altavista.com Robert, 30,000 chips per 2" wafer? Seems to me that that would make them almost impossibly small to work with.

To: Robert Jacobs who wrote (3475)	8/4/2000 12:41:32 PM
From: tekboy	Read Replies (1) \| Respond to of 10713

1) just like to thank the wise old cree hands, and especially unc dubyah, for a stellar performance during the recent gut check. It turned out to be a false alarm, but--given the price action and the recent history of some other tech faves--I don't think it was a "boy crying wolf" episode. Anyway, this is the kind of situation in which these boards are simply priceless, and as one of the technofinancomorons inhabiting them, it's great to know there's someplace one can turn in a crisis to separate fact from FUD. 2) in that spirit, this PM I got recently is worth posting publicly: "I am a long time follower of Cree and I would guess this is all FUD. On Yahoo, be sure to use the new Ignore capability and filter out Wondumsuc_agin as he is a basher for sure. Unless you are on margin and have positions in peril, I would stop watching Cree for a while (in GG fashion most news and almost all message board info is not an issue). Hang in there and repeat after me: Cree is not Citrix!" tekboy@luckytoknowsmartpeople.com

To: Robert Jacobs who wrote (3475)	12/5/2000 3:08:17 PM
From: slacker711	Read Replies (1) \| Respond to of 10713

Though this discussion began on the G&K thread, I thought it might more properly belong on the Cree thread. For those who dont follow the other thread, I was disturbed by the allegations made by Greenberg, particuarly by the appearance that CTHR acted not it's own best interests but rather Cree's. My orignal thoughts were here.... Message 14931377 This is my response to a post by Robert Jacobs on the G&K thread.... Cree did not "stuff the channel" with moissanite. C3 "stuffed the channel" all on their own. Cree was the vendor, C3 the customer. Unfortunately, after reading through the CTHR SEC filings, I think the issue is a little more murky than that. Over the last two and half years, C3 has recognised $25.7m worth of revenues, while piling up $21.4m worth of inventory. The inventory is listed as a current asset on the balance sheet and is recognised at the lower of cost or market determined. I think it is safe to say that the inventory has not been recognised as revenue....since they have more carats worth of inventory than revenues during their corporate life (if I am wrong about this, someone please correct me). The question then becomes....why would C3 pile up so much inventory? Note that I have not yet looked at Cree's SEC filings, so perhaps more information is contained there. According to the SEC filings, I dont think they had a choice. This is the scenario that seems to have occurred. Prior to June of '98, C3 was unable to receive crystals in sufficient quantity or quality from Cree to begin sales. During the second half of '98 they began to sell limited amounts of moissanite as Cree began regular shipments. C3 had an agreement with Cree to buy all of the crystals Cree supplied until June of '99. This was not a problem, since demand was outstripping supply. In this situation, according to the filings, Cree had the SOLE discretion to decide weather to build more crystal growth systems to satisfy the demand by C3. They also had the sole option to either buy the systems themselves.....or to bill C3, which would give C3 the first rights to all of the crystal. Cree chose the latter option (the systems cost $2.8m) Interestingly....in either case, C3 MUST accept all of the crystal that Cree was willing to ship, for a period of six months. Think about that...C3 paid for the systems, and then handed Cree a blank check to ship product. The new crystal growth systems came on-line from a period of Aug-'99 to Dec '99. During the time that the new machines were coming on-line the yields of Cree's crystals improved dramatically...also demand didnt materialize like they had planned. Thus C3 was faced with a situation in which they had new capacity coming on-line which would have a dramatically higher yield....and they couldnt say no to shipments. The final piece to the entire puzzle occurred in May, when C3 agreed to sell the crystal growth machines (it never says how many) for $5m to Cree. Unfortunately, this is not in dollars....it is $5m in moissanite. They already had 3 yrs worth of inventory when this agreement took place. Let's review. CTHR agreed to let Cree decide when to buy new crystal growth machines. They also agree to let Cree decide who would finance the machines (which would be built by Cree). They also agreed to buy all of the crystal which Cree could produce. They then sold the machines back to Cree for more crystal....which C3 already had in abundance. The only thing I can figure C3 got out of this was a secure source for moissanite and a exclusivity agreement. For the life of me, I cant see much risk that Cree incurred in this relationship. The part that is still the most disturbing (and makes this look underhanded) is that the CEO of C3 was the brother of Cree's CEO. One mitigating factor in all of this....moissanite is not a "decaying" type of inventory. It isnt like have 4 yrs worth of computers (or modems) on hand which will become quickly out of date. I know that this issue has been looked at in-depth...so would appreciate any feedback./corrections. As I said in my previous post, I dont believe that any of the above will effect Cree's business outlook....which leads me to my current dilemma in which I love the business but am unsure about the management's business practices. Slacker