OSXman 12/5/2012 | 12:16:19 AM
re: Galazar Garners $15.4M that Galazar could raise money at all.

Does anyone know on what terms Galazar raised money?

Consider Galazar: it is a private, startup company. It has no revenues and is burning cash. It is cash strapped, which is why they are raising money. It has one product, which seems like a nice product, but they are being sued by Transwitch for patent infringement. They have targeted the Ethernet over Sonet market and hope to introduce two new chip designs this year.

Consider, now, Transwitch: it is public, so a market value is well established. The market cap is $45 million dollars as of today. After adjusting for debt, it has $90 million in net cash. They have the Ethermap-3 and Ethermap-48 chips, which compete in the same space as Galazar's MFS-250 product. They also have a wide range of other products, both new and established. They have recorded over 200 design wins in the past year. Like Galazar, they are targeting the Ethernet over Sonet market. Also like Galazar, they have very little in the way of revenues and very much in the was of negative cash flow.

The interesting question in my mind is why anyone would invest in Galazar when they could invest in Transwitch on far better terms.
andiji 12/5/2012 | 12:16:07 AM
re: Galazar Garners $15.4M That's a fair point, but with Transwitch Q4 revenues of $3.6 million and a Q4 loss of $17 million (with only $1.6M in special charges) (if I'm reading their web site correctly), I could make the case that there might not be enough business to sustain Transwitch.

Indeed, the fact that the liquidation value of Transwitch is higher than the market value suggests that the market doesn't rate their business plan too highly.

Anyway, it's always nice to have some competition in the marketplace...
TheNet 12/5/2012 | 12:16:00 AM
re: Galazar Garners $15.4M Obviously, some of you guys haven't worked with Transwitch products often...
OSXman 12/5/2012 | 12:16:00 AM
re: Galazar Garners $15.4M Your message is ambiguous. Are you saying that Transwitch's products are good or bad.
sevenbrooks 12/5/2012 | 12:15:59 AM
re: Galazar Garners $15.4M
Transwitch's products are notoriously bad. Anybody remember trying to use their DS3 chips when they first came out? How about Cubit?

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