The Wall Street Journal published a biographical article (free till May 10th) on George Gilder, one of the chief exhalers that inflated the optical bubble of 1999.
I mentioned Gilder last week in my first post on Wintegra (WNTG). He has consistently spoken positively of a network processor company called EZ-Chip and the holding company LanOptics Ltd. (LNOP). His support for the company has been unwavering for years as he continues to predict an NPU revenue ramp for EZ-Chip 6 months into the future. I hope this isn’t because EZ-Chip is a leading sponsor of his annual Telecosm shindig. How about some introspection into why things aren’t working out as he projected?
I received a good question on the Wintegra Inc. (WNTG) post I made last week. I felt the response was worth a post on it’s own. Please remember this is not investment advice, and not a negative outlook on Wintegra as a comapny, just my opinion of something that needs to be considered when attaching a multiple and valuation to the company. References to Teknovus and Passave are in context with the previous post.
From “Watcher” –
I don’t really understand your Cisco example: according to your example Cisco doubled its purchasing from Wintegra in 3 years (2003-2005): 27% of $4.5M in 2003 to 10% of $19.5M in 2005: can you explain this again (why doubling sales to Cisco is a problem)?
You ask a good question. In the interest of brevity I oversimplified my argument. Let me explain in detail.
Wait – the mob cries “This Time It’s Different” – Wintegra doesn’t make those ridiculously large 10G and 2.5G NPU’s that tech messiah George Gilder preached were the salvation of the coming optical revolution. (He still does, BTW – what is EZ-Chip paying this guy?). No, Wintegra’s NPUs are for the access network, Fiber to the home, DSL, i.e. the current pump-and-dump sector for Telecom.