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Brocade Communications Systems, Inc. Message Board

  • oilman95762 oilman95762 Jan 12, 2013 1:28 PM Flag

    Brocade: Reading Between the Lines...

    Aw, come on, BOD!! It doesn't take five months to find a good CEO for a small cap tech company. Silicon Valley is full of experienced tech executives who should be jumping at the chance.

    Unless, the BOD has something else in mind. Maybe they truly prefer to sell the company rather than hire a new CEO. That would explain the long delay with no news. After all, what executive would leave a lucrative position to lead a company that's going to be sold anyway. Makes no sense.

    The only question left is why hasn't any news leaked out if they are indeed shopping the company again? Who knows. But for full disclosure, in addition to my share block I'm now holding 170 BRCD $5 Apr-13 calls. Yes, that's almost a third of the contract open interest. One thing is for sure, we'll know something one way or the other by April.

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    • one thing you can be sure is that BRCD will not be sold before April or maybe a year. The new CEO was not brought in to sell the company rather than enforcing the operational displine. ie. get rid of the parts not making money or no growth, laying off workforce to get meaner and leaner. Klayko is a salesperson not an operational guy, the new one is the opposite. if the company is going to be sold shortly, why would Klayko leave? he can leave after the sale. it is not up to a single person to sell the company. it is about the fundamental, stock is cheap for a reason. And they still dont have a sales VP, which is really, really scary!

      • 1 Reply to xz1
      • You're right!! Now that a new CEO has been named, there won't be a deal anytime soon. The new CEO will attempt to better position Brocade with the recent developments in Ethernet fabric and SDN . My sense is that after a reasonable period of time, probably six months to a year, Carney will finalize a strategy to maximize shareholder value. I suspect that if there no growth in Ethernet and SDN doesn't gain traction, he will try to peddle the company again.

        Bottom line, there's no silver bullet. We'll see.

    • Another unanswered question is why Klay-Klown would suddenly dump 1.8 million shares in the mid-5's. He could have sold a small portion to pay taxes on the option shares and legally hold the remaining shares if there was a good chance of a deal.

      To quote Winston Churchill, right now the Brocade saga is a riddle, wrapped in a mystery, inside an enigma.

    • What you guys don't get is the BOARD OF DIRECTORS WILL NEVER SELL. BRCD is a piggy bank to them and they have no incentive until they are replaced. All BOD and Top level executives barley own any stock..... They issue stock options and everyone sells the stock and waits for more options. profits go up = more stock options. Review the float, it's going up not down.

      WAKE UP, this is a piggy bank for them.

      • 2 Replies to wow999wow
      • Most investors eventually will figure out that there is no hope for BRCD with current BOD and management. There is no buyout. No wonder Klayko sold in mid $5. Elliott tried to change things around but sold eventually with losses.
        So, it is waste of time and money. There are many better invetments out there.
        I bought SVU between $3.41 to $3.46 and I am planning to tender them at $4 by next week. I get 16% in a few weeks. This is like BRCD to go to $6.40 if I hold my BRCD shares.
        Investors still can get SVU in mid $3 and tender at $4. Cerberus investment wants 30% of outstanding shares at $4. There are other firms who are accumulating plus huge short covering.

      • So why don't you sell your 100 shares and find another stock to complain about?

    • take under at $5 in JNPR stock 4 for 1. JNPR is at $20, now eps at 55 with BRCD they add another 125 million shares to their OT, eps of $1 for combined company, 24% dilution for JNPR shareholders yet eps would jump 34%. Plus cost savings in SG&A of at least 200 million would yield another .31 cents. Would the market give JNPR the same valuation of pe of 25? Probably, but I would think that with the cash JNPR has it could easily trade at $25-30 which would put BRCD at $6.25-$7.50.
      Its a stock deal thats going to take us out. And $5-7.50 is the price.

      • 2 Replies to mrrobmac
      • No way could Brocade be bought in a "take under". First of all, the company is worth much more than $5 on an earnings and cash flow basis. Secondly, institutions control the float and would not tender to a low ball offer. Thirdly, the BOD would be instantly sued by shareholders if they even proposed a sale at a "take under" price.

        Bottom line...get real, pal!!

      • My guess is 7.50-9 as a buy out with an extreme price of 12 if a second bidder comes along.
        ont underestimate this market, this thing has been basing forever and imo is undervalued right here. Time will tell I guess.

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