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TranSwitch Corp. Message Board

  • altrfan altrfan May 2, 2013 9:42 AM Flag

    Earnings date??

    It would be nice if the company could announce this.....given that many other firms have already released the March quarter financial results.
    Noticed that on the TXCC website all previous investor presentations have been scrubbed, including the previous annual meeting presentation......not exactly a confidence builder.
    I have previously commented that to date I haven't observed anything from TXCC that would indicate anything had changed with the HDplay ramp. The product has been qualified for production and has been shipping to an increasing number of customers. That of course would not rule out there could be problems in getting good production yields thru fab, wafer sort or final test...which would mean #$%$ gross margins and added expenses in constantly trying new fab processes in order to fix the problems.
    Wonder if that is an issue??
    In addition, TXCC has yet to announce the closed sale of the smaller group of patents, even though Ali said it was a done deal and TXCC was only waiting for the final paperwork to be signed. I think that in spite of all the previous big talk about the value of the patents it is evident there is little to no value there.
    There was also previous talk from Ali about TXCC working on reference designs for pico projectors with a number of larger firms in that space. So far zero zip and nada.
    While I am not a fan of pointless press releases (a PR about a firm like Teles is a perfect example, especially since it was about a product line TXCC has been loudly proclaiming they are exiting) it would be nice to hear 'something'......as the company's actions have been somewhat different of what has been said, either from Ali/Bosi or Lynch's comments in the November CC......wonder what any of those investors he talked to/reassured think about what he said at this point in time.

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    • TranSwitch Corporation (NASDAQ: TXCC), a designer, developer and supplier of semiconductor solutions that provide core functionality for voice, data and video communications equipment, has fallen more than 80% over the past 52 weeks. As one would expect, the drop has led some disgruntled shareholders to voice their opinions about the stock.

      Perhaps the loudest such voice has been that of Gabriel Brener, whose Brener International Group LLC owns approximately 1.02% of the outstanding shares. Mr. Brener sent a letter to TranSwitch’s Board of Directors on April 18, 2013 demanding some big changes, including a sale of the company, in a Schedule 13D filing made with the SEC.

      Click Here: Read the Complete Letter to the Board of Directors

      Complete Lack of Performance

      Mr. Brener’s letter begins with a scathing review of management’s performance over the past several years, calling the current team “completely incapable of operating the company”. Since Dr. Khatibzadeh took control of the company in 2009, Mr. Brener indicated that the company has moved from revenues of $56 million and a net loss of $11.5 million to revenues of less than $18 million and a net loss of more than $18.2 million last year.

      The company’s two restructurings have also been largely unsuccessful, with the first failing to restore profitability and Mr. Brener believes “it is doubtful that the second restructuring will be any more successful than the first”. The company’s auditors have also expressed doubts as to whether it could continue as a going concern, underscoring these sentiments. All of these trends suggest that management has been destroying rather than creating shareholder value.

      Overpaid Management Team

      Despite the lackluster performance of TranSwitch’s management, Mr. Brener notes that they have been compensated at lofty levels. In 2012, the company paid its five named executive offers more than 11% of its total gross revenues, or $1.365 million in cash. The company also granted several stock awards that will significantly dilute shareholders, while the Board of Directors receive compensation of about $270,000 in cash.

      Finally, Mr. Brener notes that the 90% of the short-term incentive plan award for the five named executive officers is based on the company’s revenues. He suggested that instead the Board of Directors should set “these targets based on profit… [as] stockholders do not benefit if revenues grow but the company does not move towards profitability”.

      Pushing for an Outright Sale

      Mr. Brener ended his letter to the Board of Directors calling for an outright sale of the company, or at least that substantial change is made to the management and Board.

      “As the Company changes its business strategy yet again, I would hope that the Board would also explore a sale of the Company. If the Board insists on remaining independent substantial changes should be made to management and the Board.”

      In the end, investors will have to wait and see whether or not the Board of Directors heeds this advice or continues with business as usual. But if they do take action, investors may want to keep a close eye on this stock, as a potential buyout or shift in the management team could unlock shareholder value, either over the short-term or long-term.

    • Altrfan,

      TXCC issued Q1 results on May 8th last year. If they release earnings late next week or early the following week they are still basically on last years timeframe.

      • 1 Reply to niles_2010
      • Hey Niles,

        They have plenty of time, I was simply commenting that it would be nice to hear 'something'......unless of course Ali and crew have 'engineered' a sale in the 60-70 cent range (they of course will benefit though other means, we will be screwed) or some such garbage. I wouldn't put it past them, as the very best I can say, as someone who owns the stock and thinks HD**** will work out well (though perhaps not for current shareholders) is that Ali/Bosi etc. are completely lacking in professional pride.

        Looking back over the last year, with what has been said by management and Lynch in his little speech and factoring in the SEC filings (where there is no Safe Harbor) and given what TXCC knew internally about potential revenues/cash outflows, bills due etc. it is difficult for me to see how this could have handled in a worse manner. Did anyone who follows the stock, a small number to be sure, seriously think that there would be a 50% increase in shares, and that this would be considered the 'best option' the company could come up with.....especially since Ali and crew had consistently commented on how 'sensitive' they were about share dilution and shareholder value? Even if everything is on track with HDplay and the future there is bright, Ali has seriously damaged the TXCC brand with his performance.....just take a look at the share price and market cap of the company.....In fact, I have heard the Webster's Dictionary folks have changed the definition of 'Half-assed' and simply put a picture of Ali there with a note: "See Transwitch performance".

 
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