To: 16yearcycle who wrote (2800 ) 11/7/2000 1:46:05 PM From: Bill Harmond Respond to From Briefing.com: Transmeta (TMTA) : The long awaited initial public offering of mobile computer processor developer, Transmeta is expected today, but influential semiconductor analyst, Ashok Kumar of Piper Jaffray has issued a note this morning questioning the prospects for Transmeta's Crusoe processor. The draw to Crusoe is the lower power requirements and therefore longer battery life in your laptop. However, Kumar points out that recently IBM scrapped plans to use the Crusoe chip, deciding instead to stick with Intel (INTC). He also says that Compaq (CPQ) and Toshiba have abandoned the Crusoe as well, and the only top tier OEMs left to deploy Transmeta's processor are the company's strategic investors -- Sony (SNE), Hitachi (HIT), and Fujitsu. Intel is of course the 800-pound gorilla in processors, and although they may have stumbled out of the blocks, their efforts in low-power processors are now being fast-tracked and have lead to significant improvements. Kumar says that Intel does not utilize Transmeta's "code-morphing" technology, however has developed technology that allows for even lower operating voltages, thus eliminating Transmeta's strategic advantage. He does include a disclaimer by noting that code-morphing makes benchmarking difficult because the processor goes faster if you run a program more than once. All that aside, it should be noted that the offering is said to be oversubscribed and lead underwriter, Morgan Stanley Dean Witter priced the 13 mln shares for today's offering at $21, well above the original offering price range of $11-13 per share. It should also be noted that Kumar has made his most significant calls following Intel, and USB Piper Jaffray is not involved in today's IPO. However, the points he raises are food for thought if considering an investment in the processor space
