You need to do a little more research. The shares are not going down because of a possible reverse split. The issue here is not delisting, but the survival of the company. My take is that they have a great product, but because of the precarious financial position, large companies are reluctant to commit to buying.
Thanks for the great reply. I am pretty new to stocks and thought this company might have the potential to make some future gains. I am not hesistant about the whole reverse split that might happen and how will the BOD or managing team will take up on this situation. Usually, reverse split does not help the investors but a few company pulled it off.
When Chairman Lynch made a statement prior to the last conference call, one of his key points was that TranSwitch needed "scale" to be successful. He talked about TranSwitch partnering with a larger company and to date that has not happened. New Merc has posited that the problem may be in the production of the IC and whether they can deliver a reliable and cost effective solution. It has been over a month since we had any news on the acceptance of video connectivity products and it is reasonable to think the orders aren't exactly pouring in. Time is not on the side of the company and if the ramp doesn't materialize soon, they are done. Unfortunately bad things can happen to good people i.e. I think Dr. Ali and his management team have given it their all and it is definitely not a scam.
"because of the precarious financial position, large companies are reluctant to commit to buying."
You are correct. Every TXCC competitor will bring up TXCC's financial problems. Although most customers will require an agreement from TXCC that, in the event that TXCC cannot deliver product, the customer is authorized to order silicon direct from TSMC.
The unstated problem is the fear that TXCC will end up with new silicon that doesn't work properly and cannot fix it. In that case the affected supplier must have a competitive backup solution