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Technology Stocks : DSP Group: an incredible bargain? -- Ignore unavailable to you. Want to Upgrade?

To: Tom Caruthers who wrote (970)	2/4/1999 2:37:00 PM
From: Dieter R. Wasserbaech	Respond to of 1055

Tom and S...thanks for the great analysis. DRW

To: Tom Caruthers who wrote (970)	2/8/1999 6:38:00 PM
From: savolainen	Respond to of 1055

[audiocodes] hi tom and dieter, thought this one might be worth keeping track of: dspg owns 26% of audiocodes which reportedly will be doing an ipo this may... in the most general terms, if say audiocodes does their ipo and raises say $40+ k , would think that this could be another 10k± for the dspg balance sheet... ---- Thursday , Feb 4, 1999 Sun-Thu at 18:00 (GMT+2) Headlines Start-Up AudioCodes to Issue on New York Stock Exchange in 3 Months By Ella Jacoby Start-up company AudioCodes of Yehud is planning an IPO on the New York stock exchange in May 1999. The company declined to either confirm or deny the report. "We do not make a habit of responding to such rumors," company marketing manager Oded Morag said, "we have no comment on the matter." AudioCodes was set up in 1993 by Leon Bialik and Shabtai Adlersberg, founders of the New York traded DSP group. The company was initially financed by the founders, who now hold 43% of the shares. The DSP group holds 26%, and the Polaris, Chase, and Genesis funds of the Oppenheimer group hold 14%. The funds participated in the sole external fundraising held so far, in mid 1997, based on a company valuation of $20 million. AudioCodes develops and markets voice compression chips and boards for information networks operating on IP (Internet Protocol). This is relatively new field, called Voice over IP, in which information networks are taking an increasing share of the communications market. This stems from the low cost involved in their set up and maintenance, and also from their efficiency, quality and smart features. AudioCodes chips enable voice compression of up to twelve times on data lines, thereby making more efficient use of the bandwidth. The company's direct customers, with whom it has OEM agreements, are companies that develop and market equipment for these networks for local and international telephony companies, a growing sector following the opening of the market to competition, and variously sized organizations. Among the company's customers are ClearNet, Netscape, Cisco (after it purchased Selsius), Motorola, Ascend (purchased by Lucent), VocalTec, Breezecom, Gilat, Tadiran and RAD Israel. Potential customers for compression products of the sort AudioCodes manufactures are heavy switching equipment manufacturers, such as Lucent, Nortel and Ericsson, which are currently developing solutions for the IP infrastructure. Published by Israel's Business Arena February 4, 1999 globes.co.il --- back to recent events... have been thinking a little on timing... dspg warns... stock drops... and within days an investor puts down $20+ million for a piece of the action... and is willing to let it ride for 12 mo... hard to come up with a scenerio which doesn't have this scripted... don't believe it is necessarily bad, and first thoughts have dspg trying to make the best of the inevitable product transition shortfall... giving an investor an attractive entry point while raising more cash... for the latest scheming... also a little less than 1/2 the shares issued by dspg to this investor are in essence just rolling over shares dspg recently bought back in the same price range... (they're getting the cash back) in the near term unless we get press releases with oem partners the street likes, hard to imagine a pop in price... analysts on the cc did not seem particularly sympathetic... or in a particularly good humor ... it was obvious from the cc none saw the shortfall coming... think they will take the jaundiced view of show-me the money.... unless all kiss and makeup after the upcoming cordless etc.. news.. any thoughts? best wishes s