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Qorvo, Inc. Message Board

  • rickarooski rickarooski Jul 27, 2013 2:40 PM Flag

    RFMD lives in the straw house. It's perfectly clear what is goin on.

    Once upon a time there were 3 RF companies. SWKS, TQNT and RFMD. They all had the same products and sold to the same OEM's. Somewhere along the way the POWERS that be decided to do somwthing with the triad. They put one Co in a brick house (and adorned it as the #1) they put the next in a wood house and allowed it to play along, not at a stellar rate but they recognized it enough to elevate the price enough so that investors could actually pull in a profit. They put the 3rd in a straw house to be at the mercy of all the outside elements, and, not protected by anything of substance. Note that this house is losely built on a poor foundation and it's operated by knuckleheads (who else would build a straw house)

    You've probably gathered who is who by now. Suffice it to say that RFMD is the ugly red-headed stepchild. The pukes have no intention to allow RFMD to price-appreciate as they have 2 other Co's that fit the bill for the other 2 houses. The world is round they way they have it. There's no need to upset the apple cart as RFMD has earned the bottom rung on the totum pole. The role it has been relogated to over the last 6 years and will continue to hold until such time that RFMD gets taken over. THAT, is the only way that RFMD will reward a share holder. Being sold is their only salvation and the only realistic role for the compant to provide even a meager return. BTW, RFMD on the chopping block is in the very near future IMO. That way management can write the final chapter on their own personal wealth, and, put this zombie equity out of it's misery.

    RFMD isn't even a tradable device anymore!!! (now THAT is sad!!)

    Carry on.

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    • The problem, roosk, is that companies in a hopeless situation that still have value get sold off for pennies on the dollar. The executives of the sold company make out as bandits one last time because they're taken care of as part of agreeing to the deal of being put out of misery. Thus, though your scenario may well come to pass, it won't reward shareholders if done under duress.

      The other way Rfmd might consider being bought is to actually admit their horrible five to ten year capital structure misery campaign will require another five to ten years of miserable campaigning, and that is not fair to shareholders. So Rfmd takes a buyout at a price somewhere near parity, somewhere around $8 or $9 a share when the debt is paid off within eight months and the eps is up past 12 cents to 14 cents a quarter.

      Then ultimately the scenario follows your overall take: Put the poorly structured company out of its misery, and use its value to drive another set of synergies. For a company like Qcom or Intel, to buy a company like Rfmd is pocket change but to have Rfmd might enable some proprietary technologies by integrating a specific set of Rfmd solutions to the modules added to the proprietary processor modules. In this way, Qcom and Intel could duke it out with some proprietary advantage over say a Mediatek or a Spreadtrum, leveraging more of the content. Mdtk and Sprd would have to scramble for the technology that would then come from Swks, but at a much higher price.

      Just some possibilities. As Rfmd gets a hernia trying to lift its own stock price, the inevitability of gross margins being the company's only focus becomes crystal clear. Rfmd can't buy back shares and can't grow revenues another 20% soon enough. The only lever is margin.

    • You contraidicked yourself. You say that the "POWERS TO BE" put a company in a brick house and then you say that knuckleheads of the third company built their own straw house. The Paul Harvey page 2, the rest of the story. Later on the cost of the brick house after amortorization was too expensive for company one to overcome. The straw house people had little capital built into their facility and were able to offer their product, that equals or exceeds the quality of any other houses product, at a lower price. The people in your neighborhodd most likely appreciate the quality of construction of house number one. The other 99% of the world that live in straw houses appreciated the third company's tenacity and determiantion to provide them with an affordable high quality product. In the end the straw house will overcome and will survive.

    • nice comment, appreciated from you

    • SWKS was formed in 2002 and AVGO in 2005. let's call the management at RFMD "The Apple Dumpling Gang." there is only one management team worse than RFMD in the "RF" sector.....ANAD.