If Baird is correct, this is the end of SIGM. Or at least the beginning of the end.
This is why BRCM was breaking out while no one else was. I have been doing this long enough now to have known better that when you have a stock that is trading at such huge unbelievable discounts to what metrics it 'should' be trading at, and then it never moves up to correct that perceieved misprice, (which could have been caused by a simple position blowout margin call or such) someone definitely knows something.
There was no way for any of us to know the connection between BRCM and SIGM unless you're in the trenches. But someone did and that's why SIGM didn't go anywhere. I was scratching my head just yesterday trying to figure it out because even in a weak market, you'd normally get at least a normal retracement. But not here. I was about to pull the trigger yesterday on a collar by buying Jan 09 $30 puts against my entire position just in case, but decided to wait to game the market by getting them cheaper as the stock moved up as expected.
This is a classic lesson in not timing the market. Just always be protected.
So, that's a nice $15k haircut I'm taking today. I'm bailing on SIGM because if they are losing that much biz to BRCM and especially their biggest customer in MOT, SIGM will be in the low single digits very soon with absolutely no catalyst to change things. BRCM must have played serious hardball to get those accounts and gave away the store to do it so they can get their foot in the door with this ramp in IPTV and blueray.
AI
