re: PMC-Sierra Sinks on PON OutlookIt seems to me that AMCC and PMCS are in some serious trouble for passing on the Ethernet. At the same time, the companies in IP are getting killed with backdating issues. SOXX is off 30% in the last three months.
re: PMC-Sierra Sinks on PON OutlookIt's not just that PMCS paid 7x revenue for Passave.
First, they did a large convertible deal after the shares had decline from $10 to a new low of $6. Then they paid $300mm for Passave which had already filed an S-1 valuing the company at $198mm.
re: PMC-Sierra Sinks on PON OutlookFrom an 8-K filing on 8/30/06. PMC lays off about 5%:
On August 25, 2006, PMC-Sierra, Inc. (the GÇ£CompanyGÇ¥) announced that it plans to implement workforce reduction activities. The Company will close its Ottawa, Canada development site and plans to eliminate between 30 and 40 positions primarily from research and development, at a restructuring cost in the range of approximately $5.8 to $7.2 million, which includes a range of $2.3 to $3.2 million in one-time termination benefits and relocation costs, and $3.5 to $4.0 million for consolidation of facilities and adjustments of previously recorded provisions. In July 2006, the Company eliminated approximately 10 positions at its Portland, Oregon development site, resulting in restructuring and other charges of approximately $1.7 million. The Company therefore expects to eliminate a total of between 40 and 50 positions in the third quarter of 2006 at a total cost of approximately $7.5 to $8.9 million. The operating expense savings from these activities is estimated to be approximately $1.5 to $1.7 million in the fourth quarter of 2006 and a normalized quarterly expense savings of approximately $1.8 to $2.2 million in subsequent quarters. The Company expects to complete the restructuring activities by the end of the fourth quarter of 2006.
What a friggin mess.