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Cypress Semiconductor Corporation Message Board

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  • floppy_6 floppy_6 Dec 28, 2005 10:06 PM Flag

    If the trend is continuous.............

    My number does come out the same:

    SPWR = 32.43 x 66.8 mil (fully diluted, check prospectus, somewhere indicated additional 6 mils) = 2,166 mil

    Net cash = 135 mil

    So EV = 2,031 mils.

    CY = 14.14 x 143 mil = 2022 mil
    Net cash = about -400 mil
    So EV = 2422 mils

    There is possible dilution for CY convertible. But conversion price above $18, I wouldn't consider at this moment.

    So EV(CY-SPWR) = 2422 - (52x32.43) = 735 mil

    The gem of (CY-SPWR) is CCD div., which is projected to do 410 mil in 2006 - I am sure the teasers at this board will tease at this estimate. The flagship product at CCD - Psoc did grow from last Q 5 mil to this Q 14.5 mil to next Q 26 mil (from T.J's own mouth). Psoc has 1300 design wins.

    Let us look at the comp. - CCD did about 51 gross margin. The closest GM is NSM at 55 and BRCM at 51. Their respective EV/2006 Rev are 3.9 and 4.4. Let us be humble - let us give CCD a 3 times EV/2006 sales. Then CCD alone comes out 1230 mils exceeds the above current EV (CY-SPWR) 735 mils. So the rest garbage is not only garbage but very poisonous and stinky garbage to cost us negative 400 mils EV value.

    Garbage Divs.

    1) MID:
    Well SRAM peers ALSC still sells at 2 times, ISSI about 0.5 times. Both are losing. T. J. announced intention to halt R&D on PSRAM. Image sensors $32 mils has 30% AGR, shouldn't be categorized as garbage.

    2) DCD (63% gross margin)
    NSE alone lost $22 mils in the quarter. CY is obviously a laggard against IDTI and NETL. Sooner or later CY has to divest it. I don't believe T.J. is that stupid to hang in there.
    Special memory ($50 mils) is decelerating but not dead. COM and PLD are kind slowly dying but with great margin.

    Well all this analysis might be useless since CY is not going to spin off SPWR tomorrow. The linkage between two may never be established (eventually will). Before that, I guess we all have to hang our heads low.

    Good luck

 
CY
12.16+0.170(+1.42%)Sep 30 4:00 PMEDT