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In late February, I provided some calculations here...just an FYI for those who want to do some math after today's news.
"Correct me if I'm wrong on some of these assumptions. I just went through the Q3 financials and MD&A. Looks like fully diluted share count including warrants, RSU, and options is about 66 million. There was also about $12 million CDN worth of convertible notes outstanding that at some point should convert to equity for about 13 million shares."
It looks like the debentures will be converted at about 75% of face value to share count. Also, please note that there are more than 40 million shares, fully diluted, today. In the end, there may well be over 400 million shares, fully diluted. We do not see that as a problem for the continued operations and ultimate success of the company. In due time, the 400 million plus share count will have little affect as the end markets will justify it.
I wonder what percent of the PP is being bought by RH and RP, my guess is plenty
I am sure that was all planned by management as part of the taking the company private. Don't be naive folks...
Let's face it whoever bought this pp is now the new owners of S7 by majority stake
SVE, how many shares will the forced convertible debt add to the share count? and do you expect them to do a 2nd tranche, and if so, how many shares does that add?
40 million shares today
plus 102 million PP shares
plus 102 million PP warrant shares
plus ??? convertible debt conversion shares
plus ??? 2nd tranche shares (and warrants)
final O/S shares after all this settles will be ????
With the new funding, management can continue getting paid and SEV gets more shares at gift prices.. Looks like a win - win to me!
This will be .05 or lower in two weeks or less
Oh wait, why would insiders do that when they can continue to buy shares at 11 cents and further dilute the retail investor to oblivion
At this point, the insiders should just take the company private. Buyout retail investors for 50 cents if you think its such a goldmine
I guess you are now SEV's new friend (ex Future?)!!
Piss off with your congratulations, seriously...
Yes, the price is skyrocketing on the news. One day you will understand, but until then MAGA
New wave of beating drums and blowing trumpets starts now I guess.
I agree with you SEV123. This PP was for the insiders
Spin it how you like, the actions have not been retail investor friendly
I will reiterate what I posted first thing this morning: Expensive PP, but it just saved your company.
I think management/board waiting until the company needs emergency funding to do a private placement, as opposed to being more proactive when there was momentum in the market, has basically screwed retail investors. Those participating in the private placement undoubtedly used the dire situation to their advantage to scoop up a huge % of the company. When company was trading at 60 cents a share, PP insiders could not have scooped shares at 11 cents
You are correct, and it will likely be more like 300-400 million outstanding if they complete a second tranche. But still a good buy today. Again, a good buy today.
Steve, I think there was about 40mil shares O/S and this adds 100mil units so fully diluted will be like 240mil shares? at 10 cents a share that's a market cap of like 24 million right?
With 102m shares issued as part Of PP, and according to yahoo finance currently ~38m existing shares o/s…. I concur Gary’s valuation of $14m market cap at 10 cents per share
I posted this past weekend that I would prefer a partnership or outright sale over insane dilution. We got the insane dilution.
I'm thinking 14 million
Two things: First, would you have preferred shutting it down instead? Second, the congratulations goes to those buying recently and today. So there will be as many as several hundred million shares outstanding in the end. So what? There are large, major corporations across the US today with 1.5 Billion shares outstanding. Their worth is based on what they sell. When this company starts selling what we see coming, even 500 million shares out will still bring it to over a dollar. So, yes, congratulations to those buying recently and today.
What will be the marketcap at 10 cents?
I am sure it was a sarcastic note. Golden mine we sit on? I say it is a ticking bomb, not a golden mine…
With the level of dilution that has occurred with this private placement, Congratulations is hardly in order
Hopefully it means he has been forced out. New leadership desperately needed. He's a carnival barker.
An outright sale could have been forced, but there is just too much potential in this issue to have given up tremendous future profits. This is something we have been watching for some time. Now it is finally structured correctly for the long term growth management has wanted since inception. Congratulations shareholders, those who held on, or those who purchased recently. You are finally sitting on an actual gold mine.
We at least get to fight another day.
It also means we can see how much demand there actually will be for S7 products.
No more excuses ,go out and sell something to anybody please
I was told they shunned a firm when share price was in the .50s because it was a bad deal. How is this any better? I guess we will see another reverse split? What will be the number of total shares now?
Spectra7 Microsystems Inc. Announces Private Placement and Amendments to Existing Debentures to Permit Forced Conversion
https://www.spectra7.com/pp-2024
I guess if shareholders wouldn't have panicked and gave away shares it wouldn't have been done this low.
I know you will buy back lower as you drive up shares i bought below .10
Expensive PP, but it just saved your company.
Buyout would be at ridiculously low price in this case, right? Better than BK though… We were all duped, to say the least. But nobody to blame but ourselves, of course.
I think we are in negotiation for a buyout.... if it was a PP they'd have announced it already.... and if it was the case that one investor dropped out then with the massive price drop, that investor would have come back in potentially or it would have been relatively easy to line others up (remember that a bunch of people offered to join the PP and were, how shall I say, essentially offered a thank but no thanks).
But hey, I'm just guessing and I really have no clue.
Whatever makes you happy, SEV123...
Sure, why not?
Let's go with that
RH, has been MIA. Could be that he is fully engaged in some major testing with 2 of the largest players in AI?
The data center is certainly a volatile end market. We have a very conservative approach to forecasting and managing the business so that .....we don't get ahead of ourselves in terms of investor expectations.
You can say that again.
.....we don't get ahead of ourselves in terms of investor expectations.
The data center is certainly a volatile end market.....
We have a very conservative approach to forecasting......
Just reading between the lines.
What would be nice is an update from company about current relationship with potential customers.
If we are that close to orders flowing money should be easy to raise.
LOC with letters of intent would be nice
We will see what the message means. At least things are moving
Steve, are you talking about the possible financing?
I'm hoping that would be a partnership, merger or sale. I think dilution at this time would be quite large.
Thanks Robert for posting all that.
Looks like Macon can use SEV. From DesignCon and posted by Alan Weckel of 650 Group, “Embedded with Spectra7's cutting-edge GC1122 chips, Volex's QSFP-DD High Speed #CableAssemblies soared past industry standards, delivering low pre-FEC bit error rates.”
Why spend more money on R&D when it's already been built for you?
I'm wondering just how much dilution will take place? I hear cables currently being evaluated by two of the bigger players. No I can't confirm so I'd rather not give the names at this time.
You have CRDO without the very product being discussed in the CC and wanted by the hyperscaler's.
So way more dilution or a decent sale and I don't mean getting ripped off. I mean a fair offer.
Anyway just my thoughts.
Srini Pajjuri
Good morning guys. Thanks for taking my question. One of the questions on the data center, I think copper connections are becoming more-and-more important as AI gains traction especially clusters, AI clusters gain traction. I'm just trying to understand the market size is the way you think about it Steve, maybe and your positioning?
Because we keep hearing that this could be hundreds of millions of dollars of opportunity longer term. So I just want to hear your thoughts on, how you think about the ACC market in particular? And how you're positioned to kind of capture and leverage that potential?
Steve Daly
Yeah. Well, we certainly hear the same things. And what we're trying to do is, make sure that we have the best equalizers in the market to capture market share, to work with all of the cable manufacturers, work directly with the network folks, work with people that are designing next-generation switches, working with people that are struggling to improve Signal Integrity. And so that is where we sit in terms of a position in the market.
You are correct to say that there is a lot of copper deployed in the data centers. More-and-more that's becoming electrified to carry higher speed data. And the limitation is certainly distance. You can get it to work very well over short distances. But as you go longer in distances, you need to most likely switch over to an active optical cable or a pluggable solution and use a DSP, especially if it's a long link.
So, I think there is a spot inside of the data centers for active copper cable. You have to recognize that the history of our data center revenue has always revolved around analog solutions and the active copper cable end product that we're designing is exactly that. It's an analog solution, which makes adjustments in terms of the signal integrity through the copper.
It's also early in this cycle, and we think over the next few years, there is certainly great potential. It's probably one of the highest volume products in the data center, especially due to the reconfiguration of the data centers these days. And so yes, we are -- we see the opportunity. We are very sober about what that means to MACOM and how much revenue we'll generate. There's competition. There will be more competition. And so, we think we're in a lead position from a technology point of view and we'll work hard to try to keep that.
Tore Svanberg
Got it. So maybe because of that, how should we think about the volatility of the data center business? Because it grew very strongly for two quarters last year, then it took a breather this last quarter now starting to grow again. So is that sort of the cadence going forward sort of like two quarters of strong growth over one digestion? Any other types of visibility there would be helpful
Steve Daly
Well, I think you hit the nail on the head. It's a very volatile end-market. And we can't control that volatility. So I think investors need to expect continued volatility overtime so long as the trend line is showing that overall the business is growing and becoming more diversified, I think we'll be able to manage that business.
So you're certainly right that, it can turn on and off. You typically see that when the ISPs release large orders into the supply chain, as they're doing a build-out or you see that when they're moving from one data rate to another. Some people are saying that the speed of these transitions is increasing.
And so we're trying to keep up with all of that. But yes, you are exactly right. The data center is certainly a volatile end market. We have a very conservative approach to forecasting and managing the business so that we don't get ahead of ourselves in terms of investor expectations.
Q – Quinn Bolton
Hi, guys. Thanks for taking my question. I wanted to follow up on the Data Center opportunity. One of the big things that seem to come out of OFC is that, you're starting to see potentially a pretty large ACC opportunity at 200 gig per lane to connect GPUs together in -- across somewhere between eight to 16 racks, sounds like this opportunity could reach into the 10s, if not exceed $100 million as it ramps. And I wanted to see, how MACOM is positioned -- guys think that that's a significant opportunity for you, as you look into fiscal or calendar 2025.
Steve Daly
Well, I -- we certainly, heard and saw the same things at OFC. So, I don't think we would disagree with the fact that there's a big opportunity there. And -- so we'll have to wait and see on that. I guess, would be the best thing to say, Quinn. So, it is a big opportunity. There's more customers coming online at the higher data rates, which plays to our favor. We have a lot of different products and form factors and solutions for these customers. But you have to understand that, there's still a lot of work being done, a lot of testing, a lot of qualification and we think that this year will really be the year where we can secure strong positions for 200-gig ACC. But I would say that, yes, there's an opportunity. I think you're -- we're seeing the same things, you are.
https://seekingalpha.com/article/4688672-macom-technology-solutions-holdings-inc-mtsi-q2-2024-earnings-call-transcript
Now with that said, the data center market is doing really well. We're having a great year this year. We expect as I talked about in my script a very strong year, next year. The data rates are going higher and this makes it more complex in terms of fielding solutions due to the sort of the changes going on inside the data center we find that there is a tremendous amount of opportunities for short-reach high data rate connectivity. And that's where we play.
And then the industry is trying to bring on different ways to solve the same problem. And that's why I spoke about the LPO MSA, which is really the industry coming together and saying how do we make an optical or a copper link that uses less power. And we are absolutely right in the mix of that. And what we're very happy to see is a growing number of companies joining the MSA leading networking companies leading module manufacturers and even leading chip companies. And so we think over the long term that will be a tailwind to our business.
I'm not sure what you're getting at, but I'm sensing a lot of hostility. I posted information I gathered from the MD&A. It sure looks like management is still supporting this with their actions and their wallets. That's what management does when they see great potential. That's all
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