MRV (MRVC) completed a merger with component maker Fiberxon without having audited financials and released an 8-K outlining events that do not point towards rapid resolution. In my personal opinion, the company has willingly placed itself in a situation where they face imminent delisting, violation of Bond covenants, and virtually certain attack from shareholder lawsuits and activists. It defies explanation.
Vitesse (VTSS.pk) delivered the required fiscal discipline in Q207. While running a super-tight ship does not come without downsides, at this point I believe the benefits outweigh the drawbacks.
My biggest concerns going into the call were inventory and cash management, and the company executed well in these areas in the face of declining shipments.
I am at a complete loss to explain the markets reaction to Nu Horizons’s (NUHC) most recent quarterly results. People appear content to follow the herd for now, but the problem with being surrounded by warm bodies is it makes a quick escape impossible.
Yesterday the SEC issued a subpoena to Nu Horizons (NUHC) for documents related to business with Vitesse Semiconductor (VTSS.pk). The motive for the subpoena is not public but I suspect it is to understand the mechanics of the transactions between the two companies that enabled Vitesse to engage in bad financial behavior.
My only hope for this call was that I would not be surprised. In the absence of any information from the company since November 6 2006, I discovered my mind is capable of generating some frightening scenarios. The last thing I wanted to see was one of those scenarios realized. None were.
Finisar (FNSR) reported revenue Monday evening of $107.5M. No written transcript of the call is available, though a replay is and the company overview was updated. I thought there were three notable announcements.
JDSU (JDSU) announced that they are acquiring Picolight, a maker of VCSEL based optical transceivers. This is yet another example of healthy consolidation in the optical components business, which ultimately will lead to a better business environment for all- except for the customers like Cisco that exploit the oversupply situation. And Cisco is the likely reason JDSU bought Picolight in the first place.
The Vitesse (VTSS.PK) accounting debacle announced yesterday will impact other companies in the components market. My gut feeling is that other non-commodity component companies are engaging in this behavior right now. The old adage applies- if you see one roach, there are a thousand more.
Vitesse (VTSS.PK) announced the results of the review by the Board of Directors into stock option backdating and revenue recognition issues. I found the release lacking in new information, and I expected to see more information about the implication of several disclosures.
The WSJ profiles Tennenbaum Capital Partners in a Page One article today ($$$ Link to WSJ). I harbor no illusions about the risk inherent in my Vitesse Semiconductor (VTSS.pk) investment. The worst case scenario for the company is a liquidity crunch, which would leave it in the hands of creditors. The creditor most likely to benefit is Tennenbaum, and their track record should rightfully concern Vitesse investors.