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Technology Stocks : Vitesse Semiconductor -- Ignore unavailable to you. Want to Upgrade?

To: JK who wrote (4154)	8/9/2002 6:54:25 PM
From: The Ox	Read Replies (1) \| Respond to of 4710

I think there will be "upside resistance" every step of the way. I would guess that part of the weakness seen today is directly related to ELX, a major customer, and their flat guidance for next Qtr. This is simply another bullet aimed at VTSS's stock price. CSCO putting pressure on supplier pricing was the news the day before. I'm guessing that there is more good news for the company in the immediate future. I am willing to place a small wager on VTSS at these prices but I go into this with eyes wide open. I'm very disappointed with the company's slow response to the weakness seen across their product lines. Whether it's a stubborn reaction to declining demand or whether their customer base has been giving them false hopes for new design wins, I don't know. It's also possible that the shifting playing field has caught a fat company napping and now only lean players are getting in the game. Hundreds of millions, if not billions of dollars "wasted" by issuing shares to "worthless" entities who's focus was in 10-gig and 40-gig communications---areas recently eliminated (or postponed, if you prefer a nicer word) from VTSS's future plans. Management has talked up the company during this decline and continues to talk up "the bright side". I just don't see much bright side here but I do see some "value" at the current price. What really gets me thinking is the talk of VTSS becoming a fabless company. The only "value" left in the company is their plant+property along with their "other assets". Cash is offset by debt so unless their "other assets" are truly worth more in a fabless environment, I have to wonder where this company is going in the future? How can they generate enough "profit" to create "shareholder value" for 200 million shares? It's going to be a very tough road, one that holds absolutely no guarantee that buying at today's prices is truly a "value play". It would seem to me that VTSS should be looking at some of the "cash rich" companies in their field for a merger which could help them ride out the telecom storm to the point where their intellectual property can once again yield "shareholder value". However, if they continue to wait too long---like we've seen with many a company that is involved in the telecom/datacom field and like we've seen with VTSS's wasted R+D spending on 10-gig and 40 gig "solutions"---their days might be numbered.

To: JK who wrote (4154)	8/9/2002 7:04:32 PM
From: The Ox	Read Replies (1) \| Respond to of 4710

I'll add that our company is also looking at a major network upgrade in the not too distant future, although our budget will be much more modest than your figure. I believe there are plenty of companies like ours, who have put off tech spending, and will continue to put off tech spending as long as possible. Eventually, you have to bite the bullet if your company is to grow. Gig Ethernet has a bright future and Fibre Channel will be around for at least the medium term future. Hopefully, VTSS can refocus, retool and rework their business model to take advantage of what the future has to offer. Best regards and have a great weekend! mh

To: JK who wrote (4154)	8/16/2002 5:34:07 PM
From: Allen Furlan	Read Replies (1) \| Respond to of 4710

Hi JK. Noticed that you are with VA. Many many moons ago I worked on Project Management Task Force when the medical IR types had uprising against centralized ADP management. I wish I had listened to Marina Bates and bought shares in that small company called microsoft. But on to subject of thread. How will VTSS refinance almost 500 million in 2 1/2 years. Especially since they are many months away from stopping flow of red ink. My interest in VTSS was as a hedge against selling short LEAPS on BRCM. PMCS seems to be about in the same boat as VTSS but with much higher share price. Do you have feel for technical superiority of any of these 3 competitors?