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  • jaretwilson jaretwilson Oct 9, 2010 6:02 PM Flag

    Probably ready to bounce to $2.35-2.40 again.

    The acquisition that you're talking about, and we don't know if it's been finalized or not, is only $2 million dollars. A tiny gamble, and if it works it gets them into a new product segment -- chips for low end android devices. I assume that the other engineers they're hiring are also oriented around new products that we don't know the specifics of. It would be stupid of them to publicly tell all of their new product plans.

    mp3 and multimedia chips are a cheap commodity business, so finding new product segments and entering new markets is a smart move. With the number of new engineers they've picked up in the past year or two, I assume they're planning something big. Also, note that the CEO has only had the position for 11 months now.

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    • hey jaret,

      Its $2 million upfront, but then you have to pay the salaries of all the additional engineers...and the revenue they're currently bringing is about nil I believe.

      Look, all I'm trying to say is that right now these guys spend like 45 or 50% of revenue on R&D. This move doesnt help that. Its extremely difficult to make a profit with that kind of expense.

      Sure, at some point in the future, a product line may come out of this investment. I just think in this environment, maybe they could get a better, clearer, and quicker return on their investment.


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