Most recent employee review:
"Delusional management, with a CEO that acts like a cheerleader. He and his team are incapable of delivering on any of their predictions.
Advice to Management:
Eliminate one layer of Management. Company this size doesn't need VPs and Sr VPs."
Earnings per ADR excluding the non-cash financial income balance sheet adjustment were only 5.5 cents. Gross margin was slightly down. If not for the FDA approval hope, the stock would be trading at $8 max.
This is worrisome. Instead, we get announcements like today's "Extreme Networks Advances Extreme Partner Network (EPN) to Focus on Partner Profitability and Growth". Beware when Extreme's officers use words like "ecstatic". "I'm ecstatic to introduce the next evolution of the Extreme Partner Network which is centered on our mission to expand our growth of solutions software and the overall global partner ecosystem. Our partners are critical to Extreme's position in the industry and their dedication validates the success of our go-to-market strategy and leadership in the mid-market enterprise. " Extreme's management should be ecstatic only if it actually delivers extreme growth and profitability.
A travesty of corporate governance.
1. The stock is solidly in the grip of the note holders that shorted over 25M shares. The holders are hedged and they are collecting 6% interest on the notes. They control the share price as to maximize their return at the lowest risk. If the company is sold prior to 2020, the $65M notes will be then converted to shares at the conversion rate of $1.95/sh. That will be an instant 33M shares dilution. The note holders will be entitled to get the full acquisition price for their shares. That dilution is not accounted by the analysts with the lofty price targets.
2. What forward p/e does the stock deserve considering the large future 33M share dilution? The average earnings estimates for the year ending June 17 is only $0.26 based on the current share count. Do the analysts estimate a sustained earnings growth rate of 30% for at least a couple of years? Is this possible in this cutthroat low margin industry?
3. Based on the past of Oclaro, its number of shares outstanding during the last cycle peak, its higher past diversification and revenue level per share, I would suggest to sell the stock once (hopefully) it touches $6.
7/6/2016 Barclays PLC Set Price Target Neutral. 5.50 euro
6/28/2016 Goldman Sachs Group Inc. Set Price Target Neutral 5.20 euro
6/27/2016 BNP Paribas Set Price Target Buy 8.60 euro
6/23/2016 Deutsche Bank AG Set Price Target Sell 5.00 euro
6/21/2016 JPMorgan Chase & Co. Reiterated Rating Sell
The number of shares outstanding was then 1 B. Now it is 1.17 B. Since the last runup, the book value declined tremendously because of assets sales and writedowns. However, Barrick has lowered significantly the cost of gold production and If gold fetches $2000, ABX will reach $50.
Harshman should have replaced his top R&D officers long ago. He has not done so, This indicates weakness, complacency, and incompetence. A new CEO will revamp the top management of Harmonic. Harshman acquired Omneon for a sum greater than the current market cap of HLIT. He has little to show for it. He recently acquired TVN, a stagnant/declining old French company with low productivity and few assets. One reason that Harshman gave for the TVN acquisition is that the R&D of TVN is good and would supplement that of Harmonic's. Apparently, Harmonic's own R&D is always falling behind; hence, the need for infusion of technology from occasional acquistions. Ultimately, the long-term financial performance and stock price reflects the failure of Harshman as a CEO. He has to go, and so Neven Haltmayer.
Providing encoders to a minor broadcaster (CBC). No dollar figure is provided. The stock price did not budge.
"The Capitol Broadcasting Company (CBC) is an American media company based in Raleigh, North Carolina. Capitol owns three television stations and nine radio stations in the Raleigh-Durham and Wilmington areas of North Carolina and the Durham Bulls minor league baseball team."
6/28/2016 Drexel Hamilton Reiterated Rating Hold
I stand corrected regarding the dividends.
"The distribution of a cash dividend of US$0.24 per outstanding share of the Company's common stock, to be distributed in quarterly installments of US$0.06 in each of the second, third and fourth quarters of 2016 and first quarter of 2017 to shareholders of record in the month of each quarterly payment.."
It sells a lot to the European auto industry. The company assets and dividends are in euro. The euro has weakened against the dollar because of the Brexit. Anyhow, STM has been holding relatively well. Accumulate below $5.5.
Stronger dollar, weak macroeconomics, customer "pause", etc....