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Technology Stocks : TranSwitch Corp: Will they get Zenith Business? -- Ignore unavailable to you. Want to Upgrade?

To: The Ox who wrote (655)	10/17/2002 4:26:12 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 669

Hi Michael, I had missed this bit of news on TXCC. They just made it harder on themselves to raise additional capital. I am surprised they decided not do a reverse split to defense their listing. The move down is not quite the pink sheets, but it is not that much better either. *********************** Press Release Source: TranSwitch Corporation TranSwitch Corporation Transfers to The NASDAQ SmallCap Market Friday October 11, 4:16 pm ET SHELTON, Conn.--(BUSINESS WIRE)--Oct. 11, 2002--TranSwitch Corporation (NASDAQ:TXCC - News) a leading developer and global supplier of innovative high-speed VLSI semiconductor solutions, announced today that The NASDAQ Stock Market® has approved its request to transfer its common stock to The NASDAQ SmallCap Market(SM) effective at the opening of trading on October 14, 2002. The Company's common stock will continue trading under the symbol "TXCC". Investors and other interested parties will see no difference in how they obtain stock price quotes, execute trades or find news about the Company, following the transfer to The NASDAQ SmallCap Market. About TranSwitch Corporation: TranSwitch Corporation, headquartered in Shelton, Connecticut, is a leading developer and global supplier of innovative high-speed VLSI semiconductor solutions - Connectivity Engines(TM)- to original equipment manufacturers who serve three end-markets: the Worldwide Public Network Infrastructure, the Internet Infrastructure, and corporate Wide Area Networks (WANs). Combining its in-depth understanding of applicable global communication standards and its world-class expertise in semiconductor design, TranSwitch Corporation implements communications standards in VLSI solutions which deliver high levels of performance. Committed to providing high-quality products and service, TranSwitch is ISO 9001 registered. Detailed information on TranSwitch products, news announcements, seminars, service and support is available on TranSwitch's home page at the World Wide Web site - transwitch.com. Forward-looking statements, including statements regarding future stock price performance and liquidity, in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including without limitation, risks acquiring new businesses, risks in technology development and commercialization, risks in product development and market acceptance of and demand for the Company's products, risks associated with competition and competitive pricing pressures; risks of downturns in economic conditions generally, and in the telecommunications and data communications markets and the semiconductor industry specifically, risks associated with foreign sales and with high customer concentration, risks of dependence on third-party VLSI fabrication facilities, risks associated with intellectual property rights and litigation, and other risks detailed in the Company's filings with the Securities and Exchange Commission. TranSwitch is a trademark of TranSwitch Corporation. NASDAQ® and The NASDAQ Stock Market® are registered service/trademarks of The Nasdaq Stock Market, Inc. The NASDAQ SmallCap Market(SM) and the logos identifying NASDAQ indexes and products are service/trademarks of The Nasdaq Stock Market, Inc. -------------------------------------------------------------------------------- Contact: TranSwitch Corporation Peter J. Tallian, 203/929-8810 ext. 2427 Fax: 203/926-9453 www.transwitch.com

To: The Ox who wrote (655)	10/17/2002 5:22:31 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 669

Hi Michael, I only managed to hear the first 15 minutes of the call, but i think I will stay away from TXCC for a while. By the sounds of it management does not expect a turn around till well into 2003. They are seeing interest in new products, but end user demand is still very uncertain. They only mentioned one company that has a end user lined up and they don't expect to ship till the fall of next year. They are down to $106 mil in cash with $114 mil in notes outstanding due in 2005. Their BTB was less than 1 (no surprise given their exceptionally low revenue). They expect to burn 17 to 19 mil next Q, most of it R+D due to new product developments. They will lose 20 to 31 cents a shares next Q on rev of 3.1 mil. There are 90 mil shares outstanding. They bought no shares or notes during the Q. It looks like they will burn 1.2 to 1.6 mil a years in interest expense on the notes. Given the current burn rate (which gives them about 5 Q's of cash) and their move to the small cap NASDAQ listing that will make it harder to raise additional capital, this company has some serious challenges ahead of them. I think I will look futher up the food chain at companies with no debt, lots of cash and the potential of the greater gross margins that normally come from system sales as opposed to chip sales. In another vien, at least a company like ESST has $4.16 in cash, no debt and is still operationally cash positive.