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Sierra Wireless Inc. Message Board

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  • ciber_zhan ciber_zhan Feb 7, 2009 4:52 PM Flag

    Last time SWIR broke 5....

    It is very risky and not smart at all for SWIR to buy Wavecom. Actually many companies who need a wireless chips turn to Siemens's chips for lower price, and many companies in China turn to use Simmcom chips for lowest price. I do not understand why SWIR to buy Wavecom in such big cost. probably SWIR will not recover from this big cost as Wavecom is losing lots of its clients.

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    • I don't how risky it was, the deal was paid for in cash, they never financed anything.

      And SWIR will still be a profitable company, and still have over 100 million cash with no debt left when it closes.

      18 months ago both Wavecom and SWIR were around 30 dollars a share. When the economy recovers I see no reason why the combined profits of both companies would be all that different.

      Wavecom also recently had another offer, albetit 20% lower, so it must have some value to someone else.

      One thing is clear, the market does not like this deal in bad times, as SWIR has lost nearly 40% of it's already cheap value since it was announced.

      But like I stated previously, this deal wasn't put together to protect SWIR in bad times, it was made to accentuate the good times.

 
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