Robert, all,
I was wondering what you all think about this sales "technique": win a contract, sell warrants to purchase stock in your company to the buyer, based on the amount of sales.
"As part of the agreement, Ancor has issued Sun Microsystems a warrant to purchase up to 1,500,000 shares of Ancor
common stock at a purchase price of $7.30 per share. Vesting of the warrant occurs at the rate of one share for each $67
of revenue received from Sun."
I have to say I recently bought some ANCR based on the idea that the IPO of Brocade, a competitor, would considerably lift visibility of the company, and hence the stock price, a little like EMLX was lifted by stellar results at QLGC last year. It worked: combined with the sale to Sun, their stock has soared in the past two weeks or so. But I have no idea at first blush how to take the above, even if the market loved it.
Full article below:
Ancor Signs OEM Agreement to Provide
Fibre Channel Switches to Sun Microsystems
Number One UNIX Storage Provider Chooses Ancor to Grow Storage Networks
MINNEAPOLIS, June 3 /PRNewswire/ -- Ancor Communications Inc. (Nasdaq: ANCR - news) today announced an
original equipment manufacturer (OEM) agreement to provide its Fibre Channel 8-port switches for Sun
Microsystems' StorEdge(TM) arrays.
''Our customers' storage requirements are doubling every nine to 12 months and require a switched SAN solution that
can scale with their growth,'' said Kathleen Holmgren, vice president of business operations for Sun Network Storage.
''We chose Ancor because of its superior ability to scale and meet our customers' current and future interconnect
requirements.''
''Sun's leadership position in the Fibre Channel storage market makes this win especially significant as it endorses our
current price/performance as well as our future technology direction,'' said Cal Nelson, Ancor's president. ''In addition,
our continued participation with Sun on the Project StoreX storage management initiative will ensure we can jointly
deliver the best open platforms for our customers.''
''In revenue terms, Sun was the leading supplier of UNIX disk storage systems in 1998,'' according to Robert Gray,
industry analyst for International Data Corporation. ''This is an important win for Ancor, as Sun is also a pioneering
supplier of Fibre Channel-based storage and currently one of the leading providers of Fibre technology.''
As part of the agreement, Ancor has issued Sun Microsystems a warrant to purchase up to 1,500,000 shares of Ancor
common stock at a purchase price of $7.30 per share. Vesting of the warrant occurs at the rate of one share for each $67
of revenue received from Sun.
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Sun was first to introduce Fibre Channel to the industry in 1995. Subsequently, the introduction of Sun's StorEdge
A5x00 second generation of Fibre Channel products in November 1997 has propelled the company to its position as
number one UNIX storage vendor. More than 3 PetaBytes (PB) of these advanced storage systems, offering a full
Fibre solution from the host through the drive, have been shipped to date. The family of products is available for both
the Solaris(TM) and Windows NT(TM) operating systems.
About Ancor Fibre Channel Switches
Ancor's Fibre Channel switches are reliable, highly scalable devices that link multiple servers and storage devices in
storage area networks. Ancor's leading chip technology supports exclusive features such as hard zoning for superior
data security and cross-connected configurations that enable SANs to grow while maintaining high performance and
storage network reliability. Ancor switches are available in both eight and 16-port configurations and are sold to OEMs
and select distributors.
About Ancor Communications
Ancor Communications, Inc. provides GigWorks(TM) high-performance Fibre Channel switches for storage and
data-intensive network solutions, including storage area networks (SANs). The company was the first to deliver a Fibre
Channel switch, and the first to top the one-gigabit performance level. Ancor is a member of the Fibre Channel
Association, the Storage Networking Industry Alliance, the Fibre Channel Community, the ANSI Standards
Committee, and the University of New Hampshire Fibre Channel Consortium to promote the advancement of Fibre
Channel standards and interoperability. Information on Ancor is available on the World Wide Web at
ancor.com .
About Sun Microsystems, Inc.
Since its inception in 1982, a singular vision, ''The Network Is The Computer(TM),'' has propelled Sun Microsystems,
Inc. (Nasdaq: SUNW - news), to its position as a leading provider of high quality hardware, software and services for
establishing enterprise-wide Intranets and expanding the power of the Internet. With more than $11 billion in annual
revenues, Sun can be found in more than 150 countries and on the World Wide Web at sun.com .
NOTE: GigWorks(TM), ANCOR(TM) and the Ancor logo are the marks and property of Ancor Communications,
Inc. Sun, Sun Microsystems, the Sun logo, Sun StorEdge, and ''The Network is the Computer'' are trademarks or
registered trademarks of Sun Microsystems, Inc. in the United States and other countries.
For more information about Fibre Channel technology and Ancor Fibre Channel solutions, call 800-342-7379 or access
World Wide Web site ancor.com . Media, contact Mary Miller, Ancor, at 612-932-4071 or
marym@ancor.com or Aaron Pearson, Shandwick, at 612-841-6217 or apearson@shandwick.com.
Forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995 are qualified by the risk
factors outlined in the documents Ancor Communications, Inc. files with the Securities and Exchange Commission.
Statements contained in this press release regarding Sun Microsystems' future purchases of Ancor's products are
forward-looking statements. We cannot guarantee the timing or amounts of purchases of our products by Sun
Microsystems, if any. Factors which may affect Ancor's ability to achieve the results implied by such forward-looking
statements include whether, as the Fibre Channel market matures, Ancor is able to continue to provide the technology
and features required by the SAN market, or whether our products will ultimately meet our customers' needs.
SOURCE: Ancor Communications Inc. |
