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Technology Stocks : CYPRESS Semiconductor (CY) -- Ignore unavailable to you. Want to Upgrade?

To: jelrod3 who wrote (2092)	1/22/1999 2:32:00 PM
From: Maui Jim	Respond to of 2694

IC Works is a good company, and I've used some of their RF/wireless products (PLLs). I think this is a great move for Cypress to broaden their business scope. JB

To: jelrod3 who wrote (2092)	1/22/1999 4:42:00 PM
From: Michael L. Busser	Read Replies (1) \| Respond to of 2694

I having a tough time understanding why you say it would be dilutive. Cy has 92.2 Million shares outstanding currently. If they issue 13.7 million, this will result in 106 million shares. The fact that IC is earning 2.7 million/quarter would lead me to belive it will not be dilutive unless cy is planning on earning more than $.20/quarter which I do not believe is the case. In addition to this, there should be some cost efficiencies associated with the deal. This is the first smart thing TJ has done in quite some time. It also demonstrates they are getting away from the "I haven't invented it here" syndrome.

To: jelrod3 who wrote (2092)	1/22/1999 5:10:00 PM
From: James Rozell	Read Replies (1) \| Respond to of 2694

IC Works acquisition looks like a good move to me item # 1: Based on the numbers revenue (annualized) = 4 x 17.6 M = $70.4 M revenue/share = $ 70.4 M/ 13.7 M shares = $ 5.14/share at todays closing price price/sales = $9.50/$5.14 = 1.85 The SI profile lists CY P/S = 1.8 ; .... so in this respect, which is one valuation measure of CY stock, the deal may be very slightly dilutive. In reading the press release is the $2.7 M profit actually the average of three quarters or the sum of profit for three quarters (?). If it is the average then the 13.7 M issued shares would probably be additive to revenue as avg quarter: $2.7 M/ 13.7 M shares = $.198/share annualized: 4 x $.198 = $.79 item #2: The ICW website describes the company as a Fabless semiconductor company. Some of the work goes to TSM. Therefore there are some obvious possible synergies. From CY point of view higher plant capacity utilization. From ICW point of view they presumably receive only 1/2 of the foundry chips or 1/2 revenue from TSM. Even if the sales do not increase, therefore, there should be a higher profit margin for these devices. item #3: Broadening and deepening of CY's product line.... less % dependence on commodity SRAM. Questions: 1. How complementary are the two product lines ? 2. What % of ICW products are proprietary, if any ?