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jjz: Re: guess Ikanos is only relevant when it suits the Rim Haters' purpose. I seem to recall quite a few posts about the virtues of Ikanos, cited for examples and analogies as a competitor in Rims marketplace.
Wrong. A comparison to Ikanos is relevant when it is relevant.
Your recent vitriol disappointing...
iam: Re: ...spoke don't rewrite my words - you aren't capable. i never say they were "same thing"...
LOL! Yes you did. You said:
...if a company does a 2 for 1 split, you get the SAME 100% increase, and the same results...
I don't have to rewrite your words. All I need to do is quote them.
Next, you'll be telling me that you meant something different by "you get the SAME 100% increase, and the same results".
LMAO! You are a riot. Kinda of dumb, but a riot!
the only thing obvious here is you rlack of common sense, or any sense at all.
This from a guy who thinks that a forward split is the same thing as issuing new shares.
I guess you weren't man enough to admit you were wrong. I'm going to keep that right here in my hip pocket for the next time you harp on me about being wrong. At least I admit it when I am.
jjz: Re:As for this repeated reference to "death spiral", weren't we (Rim and stockholders) supposed to be unequivocally and without a doubt "dead" 6 months ago or subpenny or something like that from the last supposed "death spiral" funding?
First of all, the term "death spiral" is not editorial in nature. It is a bona fide, if not colloquial term that is universally applied to floorless financing instruments. Its not something we "bashers" made up. It is an industry-appropriate term for the type of financing obtained.
As for the share price predictions, once again, you appear to be putting words on my mouth. I never made any share price predictions regarding the death spiral other that to say that the price would drop dramatically when the shares hit the streets - which it did. I did point out that it is rare for a company to survive a death spiral vehicle, but that was a simple statement of fact and I also provided sources to back up that assertion.
Aren't we still 180 million shares below the 500million that was authorized 2 years ago? Geez, maybe you guys aren't right all the time...
I guess that you have slid into the routine of most of the others on this board by making things up and attributing them to me. This is the third time today that you have put words into my mouth to suit your agenda. I never said that the full 500 million shares would be used by the first toxic financing package. In fact, I remember pointing out that the SB-2 only registered a certain number of shares that would bring the total to well below 500 million. The remaining shares are claimed by warrants, so the death spiral could not have used up all of the shares authorized.
I am perfectly willing to discuss this politely and cordially. You have always been respectful to me and I have tried to do so in return. However, if you continue to try to undermine my arguments by making things up about what I have said, then I will have to take the gloves off myself.
jjz: Re: However, your pointing over to Ikanos as a direct parallel to Rims particular circumstances over the years is oversimplistic and may be akin to comparing apples to oranges.
You are putting words in my mouth. I never said that Ikanos was a "direct parallel" to RIM. I was pointing out that Ikanos and others obtained significant and sufficient favorable funding at development stages far earlier than RIM claims to be in now.
Fully three years ago, long before toxic funding was even contemplated, RIM claimed to have released a laptop-based prototype that could certainly have sufficed as proof of concept for VC investors - if it actually worked.
I have no doubt now that they lied through their teeth about those so-called prototypes - just as it is my belief that they are now lying about the FPGA.
As for Bill and Sequoia, I don't know enough about it to comment other than to point out that Sequoia did go on to fund Ikanos.
jjz: Re: Depends in part on how you define "suitable." Seems to me that VC funding is not suitable.
Why not? Because it would require an equity position, votes on the board and oversight of compensation comittees?
Given that the OS count was about 100 million prior to the first death spiral and that the 900 million is likely to be approached when the selling is done, this company will have given away close to 90% of the equity to death spiral sharks interested only in turning the shares into money.
VC equity financing would at least provide non-toxic money and give equity to people who actually have an interest in
seeing the company succeed.
Banks etc aren't in the tech business, they don't know a chip from from a hockey puck, let alone have the interest or means to independently verify the company's technology and it's likely place in the market. We just aren't there yet.
At the risk of being attacked again by density90210 for citing a competitor, Ikanos was able to obtain over $125 million in financing for a not-yet-deployed (at the time) technology that RIM claims is inferior to Embarq. It *can* be done, if the tecnology exists and is competitive. The same thing can be said for Centillium and Metalink.
We just aren't there yet. Now I realize Bill, per his story, had his contacts all ready to toss money our way, but what strings were attached???
Bill's contact was with Sequoia, IIRC. Sequoia, coincidentally, later went on to be a principal VC for Ikanos.
I don't find any of your arguments compelling at all, especially when you consider that other competing companies have obtained hundreds of millions of dollars in favorable financing for technologies that RIM claims are inferior.
Let me try ot explain it in simple terms.
Say you are a shareholder in company X. There are 10 shares outstanding, of which you own 1, giving you 10% ownership. The company is doing well, and its shares are selling at $100. The company decides to do a 2:1 forward split.
Now, the company has 20 shares outstanding, worth $50 each. You now own 2 shares worth $50 each. You still own 10% of the company, and your holdings are still worth $100. You equity stake has not changed.
Now, look at company Y. It also has 10 shares outstanding, of which you own one. It is also trading at $100 per share, but needs money to pretend to develop a vapor product. So, it promises to give away another 10 discounted shares in exchange for cash for salaries, and increases the OS count to 20. Now, you still own one share worth (for the moment) $100, but your equity stake has dropped to 5%. That's dilution.
Furthermore, the market will see that your market cap suddenly doubled from $1000 to $2000 without any increase in revenue or earnings. The market will tend to drive the market cap down to the levels at which it had the company previously valued. So, the $100 share price will be driven down to $50 to equalize what the market thinks the company is worth. Now, your one share is worth only $50.
So, company X forward splits, and you still own 10% of the company at $100 per share. However, forthe poor saps who own company Y, they only own 5% of the company, and their shares are only worth $50.
you don't have to explain anything to me cos - i can almost read, contrary to what some here think.
You seem to be sorely lacking in the comprehension part. You are always razzing me about admitting when I am wrong. You are absolutely without a doubt wrong about this. Be a man. Admit it.
the point is - the shares are available to the public for HALF price - that's automatic dilution to half value PER share, period.
Holy crap. You don't actually believe that, do you?
A split half price share would buy exactly the same equity as two full price shares for exactly the same price. No dilution. Nada.
Shazz, you are completely off base here.
dcs31: If you believe that there is a strong possibility that RSMI is developing a competitive product, as I and other shareholders do, then the loan was needed to finalize development.
Which further begs the question that nobody seems to have an answer for - why can't RIM obtain favorable financing terms if they have the competitive product that they claim to have?
Other competing companies have obtained hundreds of millions of dollars at favorable terms, yet RIM cannot do so. Why?
It is a legitimate question for which nobody has provided a suitable answer.
if a company does a 2 for 1 split, you get the SAME 100% increase, and the same results with the exception that in the split your share price drops 50% immediately.
It is absolutely *not* the same thing. With a forward split, you still retain the same amount of equity with your shares. After all, the point of buying shares of a company is to own equity in that company. A forward split does not dilute shares one single bit.
Floating a half-billion new shares for death spiral financing, on the other hand, not only drives the share price down, but also dramatically dilutes equity.
Someone needs to go back to "Investing 101".
So your contention is that Brad has on numerous occasions committed fraud, both in print and in public with many witnesses by the very specific statements he has made?
One could argue that publishing a picture of a circuit board from a consumer device and calling it an FPGA is fraud.
Oh really. What do you call delivering on the FPGA in the time that HS said it would take to get it done.
We don't know that they delivered anything. Given that the pictures that they provided of what they "delivered" were fakes, taken with their history of deception, it seems unlikely to me that they delivered anything.
You were going to ask Ketch about the fake pictures. Did you?
Are you saying that if they signed a foundry in May, they couldn't get an ASSP done this year?
They couldn't get it done in Q3, that's for sure. By Ketch's own admission, it will take at least 6 months.
427: Re: So then, when did I insist that they were not going to sell?
That's the impression I gathered from your seemingly ceaseless, visceral attacks on my belief that they will sell.
I thought that was clear...
Admit it. You have NO idea what their intent is, or do you have insider information, or maybe ESP.
Registering shares is officially a notification of intent to sell. That is the SEC's language not mine. It does not, however, obligate one to sell.
Your insistence that they are not going to sell carries no more weight than my belief that they will. Unless, of course, *you* have insider information, or maybe ESP.
You *really* need to get a grip on yourself.
rational lies
I see you are calling me a liar now, albeit in a left-handed sort of way. Its pretty ironic, actually. You posts lately have lacked any rational content and have smacked of desperation.
Pretty pathetic, actually.
yeah so thats your best defense , try to get rid of me. I will stand up to you and your 'agenda'
I'm not trying to get rid of you. I was quoting your intent to leave.
You've done a great job of standing up to my "agenda" so far. Keep up the good work. Your analysis remarkable.
LOL! I crack myself up...
427: Re: Since the options were granted last January, it was the current share price, not an 80% discount.
You're right. They granted themselves the options only days before the big orchestrated pump. The net effect is still the same...
I see that the drive-by peanut gallery is busy...
427: re: To all of the financial rocket scientists who *care so much about accuracy* (ha) that they claim the officers and Chen have already sold their shares...
I *do* care about accuracy and I never said they had already sold their shares. Given that you replied to my post about the subject accusing me of saying that they did, one has to question *your* interest in accuracy...
Please, don't do this to yourself. I know you are more intelligent than that.
Please explain the flaw in my reasoning - or is this just another patented drive-by?
Based on recent events, it wouldn't surprise me if the officers believe that the sp will increase dramatically in near future, and want to take some money out.
That makes no sense. It does not explain the dramatic discount of the options. If they believed that the share price would increase dramatically in the future, then options struck at the current share price and that vested over the next couple of years would reflect that confidence.
Instead, they granted themselves options at a strike price of less than 20% of the share price, vested the options in a period of weeks, then immediately registered the shares for sale. This has all the earmarks of officers who have confidence that the share will fall dramatically in the future, not rise.
density: Re: To understand their insider sentiment therefore is to our advantage. It appears from the the sell off, Ikanos management feels they have "ridden this horse as far as it will go."
The exact same sentiment can be applied to the SB-2 document in which all of RIM's officers and directors declared their intentions to sell off virtually all of their shares.
I haven't read it in detail yet, but registration has been brought up NUMEROUS times in the past as evidence that people were going to sell their shares, and most often they were not sold. It proves only 1 thing, that their shares are registered.
I agree that registering the shares for sale and actually selling them are two different things. I never stated otherwise. However, I find it extremely odd that they would grant themselves options with a strike price of less than 3 cents worth millions of dollars that vest completely within months, and then immediately register those shares for sale.
Furthermore, none of the officers registered shares in the last two registration statements. This is different.
Only time will tell if they sell or not. It certainly does not instill a great deal of confidence though.
427: Have you *read* the SB-2? Ketch, Willenberg, Chen, Cooper, Peckham all registered all their shares for sale.
Do you deny that?
density: There are a heck of alot of form 4's circulating around Ikanos these days.
Yes, there are.
I know that my last post to you was long, and there were a lot of big words, so I am not surprised that you didn't get all the way through it. So, let me re-ask the question I asked at the end:
If you think that Ikanos' outlook is so dismal, how can you possibly support this company? RIM not only has every single one of Ikanos' bad qualities, but also has no product, a history of lies and deceit, massive dilution, death spiral financing, etc. Yet, you are still a RIM cheerleader. Why?
It seems that both POND and NITE are market makers and they also have 144 shares they intend to sell. How can that not be a conflict of interest?
It can ertainly be a conflict of interest, but it is not necessarily illegal.
Where are the form 4's?
I believe that the registration statement filing takes the place of the Form 4.
where's your proof that they sold?
There is no proof that they sold. The registration statement declares their intent to sell. Each officer has registered virtually all of his shares for sale. This, right on the heels of Ray and Brad granting themselves a couple of million dollars worht of in-the-money options that vest almost immediately.
Come on man. Do the math...
It's not just my opinion, but the opinion stated by experts.
Which experts? Paid "experts" don't count.
I noticed that you conveniently ignored the burning question. I expected as much. There is no conceivable answer as to why this company cannot obtain favorable financing for the best copper transmission technology in the world.
Oh, wait, there is *one* conceivable answer.
SpokeShave cornered!!!! I love it. Now lets see his alibly, hope he leaves once and for all!!!!!
Speaking of which, whatever happened to this promise from you?
I am outta here this board sucks, wasnt worth a try.
I always get a chuckle out of the dim bulbs on this board. It never fails that when someone posts something negative toward me, the peanut gallery cheerleaders jump all over it like a bunch of dumb blondes on an overturned Mary Kay truck.
Because they are currently in the process of showing the world the best copper broadband technology ever developed.
I'll wait patiently for Buy_Low cto call you down on that for not qualifying it as your opinion.
Nonetheless, the perennial unanswered question begs itself once again:
If this company truly had the best copper boradband technology ever developed, why can't they find someone willing to fund it without resorting to death spiral financing?
You are free to believe whatever fantasy you wish. The facts speak for themselves.
density: Let me first remind you that you were going to look into the facts I used for industry performance to refute your ridiculous speculation about RIM share price and market cap. I can only assume that since you did not provide anything substantial to refute my analysis, that you admit you were way off base with your wild speculation.
Now, it seems that you are trying to deflect attention away from me slapping you around, and instead have turned to attacking me and Ikanos. This is not the Ikanos board. However, some of your assertions are as patently ridiculous as your previous post, so I will answer.
Because you compared RIM to your beloved IKANOS however, I thought by taking some time to learn about a potential RIM competitor, I could answer you more clearly. What I learned however was appalling.
Well, first of all, Ikanos is not "beloved" by me. I considered buying on the IPO, but never did. I choose Ikanos as a comparison to RIM for several reasons:
1) They began development at almost exactly the same time that NVXE did.
2) They also touted the world's fastest xDSL chip.
These two facts make a comparison between the two a natural, logical choice. But I have also compared RIM to Infineon, Centillium, Metalink and others.
3% margins. If I were a U.S. company with supposed worldwide prospects for dissemination of broadband technology, reporting to have shipped over 10 million ports since 4th quarter of 2002, and to date had ZERO business in the United States, isn't that reason for concern?
Given the company's 50%+ quarter-on-quarter revenue growth, most investors see much more profitability in the future. My point, that you seem to have missed completely, is that it take a very large amount of volume to produce respectable margins in the semiconductor business due to the enormous up-front costs.
As for the US business, if you actually took some time to understand the industry, you would have found that virtually no telcos in the US currently offer *any* VDSL products. Ikanos manufactures VDSL products exclusively, and they always stated that their target market was Asia. Now, they are succeeding in their target market. Imagine that.
What about the fact they have one customer who represents 47% of their entire revenue base, and only three others?
What about it? I'm sorry, but I don't understand your point. There is only a handful of large telcos in Asia. Furthermore, Ikanos has exactly four more customers than RIM has.
Could you explain to the class Spoke what a "design win" is? And why is it Ikanos in all it's 10 million port history has not been successful in gaining a single design win with a company that represents a US telco?
Look up "design win" your own damn self. As I already said, no major us telcos offer VDSL. That is not Ikanos' current market.
Ikanos proports to have VDSL2 technology that transmits at up to 100 megs/sec. Why is it in none of their publications, distance is mentioned? Could this be one of the reasons US telcos have not wanted to dance with them?
Nobody mentions distance in any publications except in general terms. There are far too many variables that can dramatically affect reach. Ikanos does talk about reach in general terms.
Maybe they have no viable product?
LOL. Yup, they sold 10 million Actiontec modem boards and called them VDSL2 chips. Geez. You are really reaching. Just for the record, Ikanos' first generation products were tested in the DSL Olympics. Their results were so good, it caused the ITU to standardize on Ikanos' DMT as a result. But, if it makes you feel any better, you go right on ahead believing that they have no viable product.
Could you explain why a company that reportedly becomes "profitable" for the first time in 2005, has an IPO in October, authorizes a 12 for 1 reverse split, raises a bunch of capital, then virtually every officer, director, and insider holds a fire sale emptying his cofers of virtually all his stock within the last 45 days.
I think you are confused. Again. You say you're a doctor. You might want to consider Aracept. The reverse split took place before the IPO, when the company was still privately held. There are currently only about 24MM shares outstanding - about 5% of what RIM has. As for the fire sale by insiders, I can't explain it, though I haven't looked into it. I will say that it is not uncommon for insiders who have been invested privately for many years to sell some shares to reward themselves when the company goes public.
I have to admit that I don't understand your visceral attack on Ikanos. I have only used them as an example of a company that began when RIM did, yet has succeeded immensely, where RIM has failed miserably.
Given your grave concerns about Ikanos, how can you possibly have any remaining interest in RIM? You are making absolutely no sense.
I haven't had a chance to read the entire filing yet. All I can say is wow.
They simply granted themselves options that, at the time, were worth over $2 million *net* and are still worth over $1 million each. And, they vested in a matter of months.
un-FREAKING-believable.
427: You can use the industry average of a PE of 27 if you want, but then what do you do with the following examples...
You conveniently picked the companies with the highest P/E ratios and ignored the low ones or the ones that are losing money. That's hardly a reasonable way to determine an average.
kanos' Non-GAAP income was closer to 13%...
You know as well as I do that non-GAAP earnings are not suitable for comparison to other companies or industry averages.
You are right, though. Speculation is just that - speculation.
However, wild speculation such as yours and destiny's is irresponsible, and I will do my best to call you down on it and provide facts to back it up.
427: Re: Ikanos did $35 mil their last quarter, so they are in the $140 mil or above annual revenue now.
No, they didn't, and no, they're not. Ikanos reported $28.5 million the last quarter, and $85 million for the year ending December 31. You can't use 4th quarter earnings for a semi company as a predictor for the entire year. 4th quarter earnings are typically significantly higher than the rest of the year. Here is the last (and only) earnings report:
http://ikano.client.shareholder.com/news/20060207-186833.pdf
Rim's chip is more likely to be in the $20 to $30 range with VoiP, Router and WiFi capabilities, as they add cost to the chip, but greatly reduce the overall cost of those features.
Source? Are you just guessing? Do you have anything to base this on other than wild speculation?
The chipsets that sell for the high end (~$15) often include sophisticated add-ons, including remote programmability, multiple ports, ethernet protocols, etc. There is absolutely no industry evidence to support your projections.
Rim should get about 60% gross margin, and 15% net margin.
Source? What does RIM know that Ikanos doesn't that would enable a margin 5 times higher? Is this more wild speculation? The industry average gross margin is 38%, and the industry average operating margin is 3.29%. Where do you get 15%?
http://finance.yahoo.com/q/co?s=IKAN
The PE for this specific segment of semiconductors is higher than $25 I believe, and could reach $40 to $60.
Source? The P/E for this segment is 27. See above source.
Re: The current P/E ratio for the sector as a whole is 25.14. (See page 6.) Based on an average P/E of 25, when RIM’s earning reach $100 million, assuming the current 322 million shares outstanding, the projected stock price is $7.76.
If this truly came from Reuters, then I have to say that this is the most pathetic bit of analysis I have ever seen. Please allow me to shoot some truck-sized holes in this projection:
Given the ridiculous earnings prediction of $100MM, let's be extremely generous and use Intel as an example to determine net margin. Intel's recent earnings statement shows a net margin of about 15%. This is more than fair as a model, since Intel fabs their own chips, and RIM claims to be "fabless". Given the 15% net margin, that equates to a gross revenue of $667MM.
Now, I have cited sources many times that put the upper-end cost per port for xDSL chipsets to be about $15. So, in order to book $667MM in revenue, RIM would need to sell over 44 million ports. This represents about 55% of the entire market, and more than 100% or the VDSL market.
So, in summary, to meet these Reuters projections, RIM would need to completely take over the xDSL market and become a virtual monopoly in the VDSL market - and that is using generous assumptions.
Contrast that with, for example, Ikanos. They have what is still the fastest xDSL chips on the market. They are currently shipping their third generation of chips, and have been producing revenue for over 3 years. Yet, despite being an industry leader, they have shipped only about 6 million ports since inception. Last year, their best year, they booked $85MM in revenue and showed $2.7MM in earnings.
Note the net margin for Ikanos. On $85 million, they netted $2.7MM, or a 3% margin. This is typical of the semiconductor industry. It takes a great deal of volume to get to high margins.
So, let's just make some ridiculously optimistic assumptions and say for the moment that RIM will surpass Ikanos next year, and book revenues of $100MM. In other words, we are assuming that RIM will do more in one year what Ikanos did in three. Let's also assume (ridiculously) that RIM can somehow extract a 5% margin from $100MM where Ikanos can only get 3%. We will also assume that by next year, the OS count will have doubled to 650 million.
Now, we have 5% margin on $100 million, or $5 million in earnings. That's 0.7 cents per share in earnings. Using an industry P/E ratio of 25, you get a share price of $0.19.
So, we are assuming that RIM can do more in one year than Ikanos did in 3, and that RIM can somehow almost double the net margin of Ikanos, and assuming that the full 900,000,000 shares are not outstanding in the same time period. Even with these ridiculously optimistic assumptions, the share price upside is limited to $0.06.
Don't let the facts cloud your wishful thinking, though.
why delete it? just let the ignorance remain on display for all to see.
LOL!
The sheer irony of that statement is astonishing...
I have to say that this is one of the most amusing thing I have seen on a stock board in a long time. Clearly, the remaining longs entered into some kind of pact to keep the events of the SHM secret from those of us on the dark side. That only serves to fuel speculation that nothing of substance was discussed. Frankly, I don't miss the sickly-sweet hype that has followed these events in the past. This is a welcome reprive.
No matter, really. The notes will be filed in an 8-K in the next day or two anyway. It is, after all, public record. I can wait until then for my so-called "attack".
Damn funny, though.
The next burning question is when will the registration statement come out. My guess is by the end of the week. Given that the last one was declared effective in less than a month, the massive sell-off can begin as soon this time next month.