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Amusing write-up. These “unofficial” tablet PC’s will likely get blown away when the MSFT-sanctioned models come out next month. JMHO.
Convergence:
The idea of an electronic Swiss army knife -- incorporating the features of a PC, phone, PDA, and possibly a camera in a compact package which runs all day on a single battery charge -- sounds compelling. But the history of multifunction devices is somewhat checkered. For example, boxes that do scanning, copying, and laser printing have never really caught on because the prices have been high relative to single-function devices with comparable performance.
The mobile PC/phone/PDA/camera may turn out to be big, but I am not basing my investment in TMTA on that assumption. Dew
INTC factoid:
Each year at this time, the WSJ lists the top 100 global companies in terms of market cap as of Sep. 30. (Financial companies are ranked by assets in a separate table.)
INTC’s rank has fallen from no. 3 in 2000 to no. 10 in 2001 to no. 21 in 2002. INTC ranks third among IT companies behind MSFT and IBM. FWIW. Dew
>> If you believe that balance sheets are "red herrings", than you have a different fundamental belief than I do, <<
wbmw: I did not say, nor did I mean to imply, that balance sheets are red herrings. To the contrary, the balance sheet is the first thing I look at when evaluating a company.
Here is what I actually said [message 2421]:
“…TMTA’s balance sheet is quite strong for an emerging tech company. So, not investing is TMTA because of the balance sheet sounds to me like a red herring. ”
I trust that you can see the difference between what I said and what you implied that I had said. Regards, Dew
A little circular logic:
I’d like to elaborate on Steak’s post. The TMTA bears argue that TMTA’s stock should be low because the company will run out of cash. Then, when the company runs out of cash, the dilution from raising cash will be painful because the stock price will be low. If you string the two halves of this argument together, the argument says that TMTA’s stock price should be low because TMTA’s stock price will be low -- and that is indeed circular.
I find TMTA’s path to profitability credible. Difficult but achievable. But for the sake of argument, let’s assume that TMTA does in fact need more capital within the next two years.
The explicit assumption in the circular argument above is that the bear market will persist and capital markets will remain depressed for at least the next two years. That’s possible, of course, but it’s far from a sure thing and not even highly probable, IMO. If TMTA’s stock price rises because sentiment in the capital markets improves, the dilution from a stock offering would become less of an issue and perhaps even a non-issue.
In reality, TMTA’s balance sheet is quite strong for an emerging tech company. So, not investing is TMTA because of the balance sheet sounds to me like a red herring.
If anyone does not believe in the prospects for TMTA’s technology, by all means they should stay away. But if you do like the prospects for the company’s technology, it strikes me as foolish to worry unduly about the balance sheet. FWIW. Dew
OT: Interesting write-up on Cognex in current Barron’s:
Does anyone here follow them?
>> thus the likelihood of a three month march from $.75 to $1.5 is an outside possibility ($1.5 is the bottom of a major technical gap and should serve as resistance on the way up). I have seen these short term counter moves in moribund stocks before. But the danger of being stuck and even seeing the stock drift further down has the same probability, IMTO <<
Appreciate you analysis, but it matters little to me when TMTA reaches $1.50 because I have no intention of selling any shares at that level. I think it’s reasonable to infer that many of the TMTA longs on this forum would agree. Regards, Dew
Zeev: I’ve followed the laser vision-correction industry for a number of years. The laser vendors have overlapping patents and are perpetually bringing or responding to lawsuits. In practice, the technical requirement that a patent be vigorously enforced against all infringers rarely comes into play in determining who is suing whom.
I reiterate that I consider it extremely unlikely that TMTA will have any material liability to Intergraph because so many of the concepts underlying parallel-instruction computing are in the public domain.
For the same reason, I think there is a high chance that INTC will prevail against Intergraph on appeal. Lower-court patent rulings have a tendency to focus unduly on the question of infringement and inadequately on the question of whether the patent claims are valid and enforceable. FWIW. Dew
>> …there is no way you reach $50 MM or $70 MM in sales quarterly, without increasing the SG&A, if you ever run a real life business, you would realize it. <<
If things go as planned, TMTA’s sales ramp will come from sharply increasing volume from a relatively small number of major customers – not from an exploding number of smaller customers. So selling expenses need not increase much if at all as unit volume increases.
>> When sales are growing SG&A is a larger percentage of sales. If they sat that these will not grow, they also say that sales will not materially grow. <<
I strongly disagree. As a percentage of sales, TMTA’s SG&A expenses should drop sharply as sales ramp.
It might be a good idea for you to speak by phone with one of TMTA’s financial executives to get a better understanding of the company’s business model. Regards, Dew
Zeev: TMTA’s guidance is for $20M of quarterly operating expenses through end 2003 including R&D and SG&A.
You may believe that this goal is unattainable, but that’s the company’s guidance per the July CC. Regards, Dew
>> AMD and TMTA are losing money, have been for some time. INTC makes profits, has been for some time. <<
But not as much as they used to. I think Lojjm was referring to the *trend* for INTC’s business model (down) rather than the absolute level of profits or losses.
BTW: I noticed your reference to the Grateful Dead MB. Does that mean you like Krispy Kreme Doughnuts?
>> Could good news from the market, or from TMTA possibly get a two-bagger out of the stock? <<
wbmw: if all you are looking for is a 2-bagger, I humbly submit that investing in TMTA would constitute an “overplay.” Regards, Dew
>> I see [TMTA] reaching $50 MM/quarter for the beginning and that is enough for break even, imho. I expect margins to improve with increased unit sales, improvement in the chip plus lower production costs due to increased competition on on the contract manufacture side. <<
I agree. To reiterate: $50M of quarterly sales at a 40% gross margin produces break-even with $20M of quarterly overhead.
I consider a 40% gross margin to be a middle-of-the-road figure for a company like TMTA during a normal industry environment. Unfortunately, now is not a normal period and hence gross margins are depressed.
But your point about increased aggressiveness in foundry pricing is germane. Some of the margin contraction from the “semiconductor nuclear winter” [ka-ching for Hseitz] will flow back to the foundries, giving more breathing room to the fabless designers such as TMTA. This will ease the pressure on TMTA somewhat while they wait for the overall business environment to recover. JMHO. Dew
Going nuts for doughnuts:
The Hartford Courant reports that this week, a man camped out for two nights outside a Connecticut Krispy Kreme shop in order to be the first in line for the store's grand opening.
OK, maybe it wasn't so dumb. For being first in line, the man won free doughnuts for a year.
But that doesn't explain the other people in line, like the guy who camped out in front of the store ... in order to buy one doughnut.
Ever wonder what happened to all those people who used to camp out in front of Grateful Dead concerts? Now you know.
[From thestreet.com]
Nasdaq SmallCap Market:
Here’s an example of a company switching from the Nasdaq NMS to the SmallCap Market:
http://biz.yahoo.com/bw/021011/112312_1.html
“TranSwitch Corporation, a leading developer and global supplier of innovative high-speed VLSI semiconductor solutions, announced today that The NASDAQ Stock Market® has approved its request to transfer its common stock to The NASDAQ SmallCap Market(SM) effective at the opening of trading on October 14, 2002. The Company's common stock will continue trading under the symbol "TXCC". Investors and other interested parties will see NO DIFFERENCE [emphasis added] in how they obtain stock price quotes, execute trades or find news about the Company, following the transfer to The NASDAQ SmallCap Market.”
--
Please, everyone, no comments about the fact the TranSwitch is trading for 23 cents. The point is that moving to the SmallCap market is a NON-issue except for bashers who wish to make it one.
>> [TMTA gets] an instant 50% gain in their stock’s value (1/3 * AMD price of $3.63 = $1.21) <<
Petz: You can’t be serious about TMTA’s BOD accepting $1.21/sh in AMD stock. I highly doubt that TMTA’s BOD would even SCHEDULE A MEETING to discuss any offer for less than $8 a share in cash or stock of a company that TMTA investors might want to own. (AMD is not such a company, IMO).
For more background, please see:
http://messages.yahoo.com/bbs?.mm=FN&board=1602585284&tid=tmta&sid=1602585284&action...
Regards, Dew
>> I just read your other post. I tend to agree with you. <<
Not sure which other post you are referring to. I guess that means I am posting too often
(Slightly OT) A good sign?
When was the last time we saw a company drastically slash earnings guidance and then trade UP the same day? That’s what is happening today with Monsanto:
http://biz.yahoo.com/rb/021011/food_monsanto_outlook_3.html
Addendum re Intergraph suit:
INTC has already stated that it will appeal the judgment (unless the judge rescinds it) even though losing on appeal will cost INTC an additional $100M damages by prior agreement. So INTC must believe that its case is pretty strong to risk the $100M plus the additional legal expenses plus the embarrassment that comes with losing the appeal.
Getting back to TMTA: I see the worst-case scenario for TMTA being a *very* small royalty payment to Intergraph on each chip sold and I consider even that outcome unlikely because many of the concepts underlying parallel-instruction computing are in the public domain. FWIW. Dew
>> Both Intel and TMTA have processor architectures which use parallel computing. It only stands to reason that if the patents do exist in the Crusoe core, that Intergraph will come after TMTA as soon as they finish with Intel, and especially if they win the suit. <<
I respectfully disagree that TMTA is likely to be a lawsuit target.
Intergraph’s decision to sue INTC was a no-brainer because a large settlement from the standpoint of the plaintiff is no more than pocket change for INTC.
If we arbitrarily assume that a potential $150M award or settlement is a minimum threshold for making a patent lawsuit worth pursuing, then TMTA looks like a rather unlikely target. Realistically, what is the probability of Intergraph (or anyone else) being able to extract $150M from TMTA?
So even if a patent-infringement suit by Intergraph against TMTA would have merit from a technical standpoint (which I am not conceding), it would seem to be a dumb business move. JMHO. Dew
Where is that article from? T.i.a.
IMHO: Itanium and Crusoe are no more like each other than any two RISC implementations. The basic tenets of RISC are very old and in the public domain.
Some notes on terminology: VLIW and RISC are related concepts but not he same thing. (In theory, a RISC processor could have a *short* instruction word.) The design of Crusoe/Astro incorporates both RISC and VLIW (maybe Astro should say “VVLIW”) but it is incorrect to use RISC and VLIW interchangeably as some journalists seem to do.
However, the use of a large number of general-purpose registers is always a feature of a RISC design and hence it doesn’t have to be stated explicitly as a design feature of a processor that is already known to be RISC.
FWIW. Dew
wbmw: When readers question your motives for posting, you should take that as a compliment. (That’s how I took it when Hseitz and Lojjm’s friend questioned mine.) If your posts were irrelevant, no one would give a hoot about your motives. Regards, Dew
Wbmw: There is a clear discrepancy between your estimates of Banias’ cost (manufacturing + amortized R&D) and the suggested prices for Banias that have been floated in the financial and technology press.
As it is reasonable to assume that the gross margin on Banias will be in the same *ballpark* as other INTC CPU’s, the conclusion I draw is that one of two things is happening: 1) INTC is deliberately misleading the public about Banias’ pricing (legal and perhaps shrewd); or 2) Your cost estimates for Banias are too low. Regards, Dew
“The first encounter with the Micro PC tends to leave the impression that you're dealing with a kitchen appliance - a toaster, for example. Only when you get up really close do you realize that the whole row of connectors on the back makes it more likely that it's a computer.”
--
A toaster! That’s precisely what I would expect from a small box with a P4.
>> …complete with an effective heatpipe. <<
Now we’re talking
Thanks for your update. I took the liberty of posting your comments on the Yahoo MB. Regards, Dew
There is indeed a Yahoo bug which prohibits access to some message boards. There’s a workaround (but it helps only if you set it up before the bug hits): Create your own Yahoo home page which includes the message boards you are interested in following. Then, even when the Yahoo bug prevents you from accessing a board itself, you can access specific messages on the board. Once you have access to a given message, you can access any other messages. FWIW. Dew
What kind of software do you design?
Lojjm: I’m responding to your Yahoo post over here because there is so much noise over there.
>> Contracts with "several blade server makers"? I didn't know this. <<
This is another example of the ambiguity of English. When silicon.com wrote that TMTA “…has won contracts [with]… several ‘blade’ server makers…”, I believe the word “has” refers not to recent activities but to blade design wins that are now in the realm of ancient history: e.g. Amphus, Rebel.com, FiberCycle.
TMTA has made it clear for at least the past two CC’s that the blade business is simply not going to be a focal point. This is unlikely to change, IMO. Regards, Dew
>> I have only seen photos of Banias operating with a fan, but assume it might also be used with a heat sink or the like. <<
I question whether the distinction between a fan and a heat sink is a critical one. Even if Banias can operate with a heat sink only, wouldn’t the sheer size of the heat sink be a disadvantage in a device as small as the Oqo?
>> Ditzel reminds me a little of Steve Jobs or Scott McNealy. I don't really like them, either, and probably for the same reasons. <<
I’ve always considered Jobs and McNealy more street-smart and just plain lucky than technically brilliant. Ditzel is much closer to the stereotypical nerdy tech wiz, which is why he made a bad CEO. He should probably stay in the lab and let Perry do the presenting. JMHO. Dew
>> Part of Ditzels obfuscation was that he chose to use the most recent Crusoe part, but the Intel part was several steps down from the most recent available. <<
That’s the way all tech companies do product comparisons.
Did you expect Ditzel to phone someone over at Intel? I can imagine the conversation: “Hi there, this is Dave Ditzel at Transmeta. I’m planning my own benchmark of our Crusoe chip against your Pentium and I would like to have access to your latest and greatest version of everything to assure a fair comparison.” LOL
>> …there is no way to avoid overhead when switching voltages and frequencies on the fly. You can believe the marketing hype if you'd like. <<
I recognize that switching voltage states incurs a significant penalty in any design. My point is that, when running a CPU-intensive application, LongRun does not have to do a significant amount of state switching because it will keep the CPU in full-power mode (even if the PC is running on battery).
>> Enhanced Intel SpeedStep® technology enables real-time dynamic switching of the voltage and frequency between two performance modes based on CPU demand. <<
I didn’t ask about *Enhanced* SpeedStep – I asked about SpeedStep. Regards, Dew
>> If I understand LongRun correctly, the Crusoe dynamically switches between multiple discrete frequencies in real time when in battery optimized mode. This does not offer the same performance as full speed mode; <<
wbmw: If LongRun works as TMTA claims (and I have no reason to believe otherwise), then Crusoe’s performance in a benchmark test should not depend to a significant degree on whether LongRun is enabled or disabled. When enabled, LongRun will still permit full power when full power is actually needed by the application.
Can you show me where INTC has claimed that the SpeedStep feature on *any* existing Pentium model operates in this manner? If you can, and if a Pentium operating with LongRun-like capabilities was in fact available at the time of Ditzel’s presentation, then I might concur that Ditzel was being disingenuous. But absent such evidence, I’m not ready to agree that Ditzel’s talk was out of line. Regards, Dew
>> …Crusoe's power management does alter the frequency as low as 366MHz in order to decrease power levels when running on batteries…You simply cannot compare the [Crusoe] CPU at full speed, and claim that will be the performance when running on batteries. <<
I do not understand what you mean. Please clarify. T.i.a. Dew
>> Then you must have been pleased to see Dave Ditzel recently describe Astro as a "Banias Killer" <<
Indeed I was. But talk is cheap and that’s another thing I’ve learned from many years of experience in the stock market.
FWIW: TMTA is my largest holding, I’m in it for the long term, and I have never sold any. Regards, Dew
Lojjm: I have observed that when a tech company says, “We welcome the competition,” or “Our competitor’s entry validates our approach,” or some such thing, it has almost always been a good time to sell. (The translation is: “We are scared like hell of the competition, but there is nothing we can do about it.”)
I hope that TMTA never makes the above kinds of statements. I would much rather hear Dr. Perry say that Banias is not bona fide competition for Astro and then enumerate the reasons. FWIW. Dew
>> How do you people feel. Am I right? <<
119: The short answer is “No.”
Tech companies in particular like to boast that they welcome competition, that competition “validates” their product and corporate vision. I have heard this line far too many times to count.
Such statements are BS designed to pacify skittish investors. Competition reduces ASP’s, margins, and profits. It’s really that simple.
If you are an investor, competition is bad; monopoly is good. FWIW. Dew
>> Traditional time frames usually show silicon PTQ one year after tape out. If TMTA keeps to traditional schedules, then they should meet their launch date of Q3 2003. <<
Does “PTQ” mean ProtoType Qualification? T.i.a.
>> If anything, CMS is just baggage that TMTA has to deal with to lessen the burden on their CPUs. <<
Baggage? Wbmb: IMO you have been one the best posters on these message boards and I have enjoyed and learned from our discussions.
But now you seem to have reverted to the INTC party line that CMS can’t be very useful else INTC rather than TMTA would have thought of it. I am very surprised to see you taking such a viewpoint. Regards, Dew