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Optical components

Optium IPO Rolls On

Optium Corp. (Nasdaq: OPTM) isn't letting a JDSU (Nasdaq: JDSU; Toronto: JDU) lawsuit derail its IPO train, even though a similar suit is being cited as the primary reason for the recent demise of Metconnex .

Optium's pricing date -- the day the IPO would launch -- is listed as Oct. 26. That's subject to change up until the last minute, but it's a sign that Optium isn't backing down.

After Optium filed its S-1 form with the SEC, JDSU and Emcore Corp. (Nasdaq: EMKR) jointly sued the startup, claiming infringement of patents related to 1550nm transmitters. (See JDSU, Emcore Sue Optium.)

All this is happening at a time when JDSU is being accused of abusing the legal system to bury Metconnex, a startup that laid off nearly all its staff last month. (See Competition Kills Metconnex.)

Rival startup CoAdna Photonics Inc. was quick to claim credit for Metconnex's woes. But a story in the Oct. 12 Ottawa Citizen describes how Metconnex couldn't cope with the weight of a JDSU patent suit filed in July 2005. The article notes that the process might have been sped up by legal pressure -- or implied pressure -- from JDSU on Metconnex's suppliers.

Optium, like Metconnex, was created by former JDSU staffers who left to continue work similar to that they'd pursued at JDSU.

JDSU officials declined to comment on the Ottawa Citizen story.

Optium, which has been media-shy throughout its short life, seems undaunted by the suit. In updates to its S-1 filing last wek, Optium tries to point out that the product in question isn't a big piece of the pie.

"During the fiscal year ended July 29, 2006, sales of our 1550 nm HFC externally modulated transmitter represented less than 5% of our revenues," the S-1 reads.

For the year ended July 29, Optium reported $69.5 million in revenues and net losses of $8.1 million, or $3.68 per share, according to the S-1.

The document doesn't have much else to add to the bare description of the lawsuit: "Since discovery has not yet commenced, we are unable to determine the ultimate outcome of this litigation."

Optium anticipates selling 5.2 million shares at $13.50 to $15.50 apiece, which would raise the company between $70.2 million and $80.6 million, down from initial estimates of $100 million. (See Optium Files for $100M IPO.)

— Craig Matsumoto, Senior Editor, Light Reading

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deauxfaux 12/5/2012 | 3:37:36 AM
re: Optium IPO Rolls On I suppose the $64,000 question is one of "guilt" in this suit. Irrespective of the facts, prospective buyers would have to be barking mad to jump into a new issue with the threat of actual an treble damages looming overhead. Especially when this is a vehicle for the VCs to start to liquidate their positions.

Optium's P&L isn't good enough to support royalties for these products and it is non-sensical to invest money which would be used in a settlement.

Absolutely insane
numinary 12/5/2012 | 3:37:36 AM
re: Optium IPO Rolls On 300Pin will continue to be the primary form factor for tunable 10G optical interfaces. For TDM interfaces, the crossing point (50/50) in the transition from 300Pin to XFP will be in 2007.

There are many different forecast ranges for tunable DWDM systems over the next two years. Certainly, the transition away from fixed wavelength to tunable began (volume point of view) in 2006 and will continue in 2007. However, the core DWDM portion of the network tends to upgrade in cycles. The aforementioned forecast ranges directly reflect the differing opinions regarding the DWDM plans of carriers.
twill009 12/5/2012 | 3:37:36 AM
re: Optium IPO Rolls On I have only glanced at the Optium filings, but isn't Optium's revenue-dependence upon 300-pin modules a little risky? How quickly is the market is moving to smaller form factors like XFP? Is the tunable segment large enough to support future growth?
Stevery 12/5/2012 | 3:37:36 AM
re: Optium IPO Rolls On Optium's P&L isn't good enough to support royalties for these products and it is non-sensical to invest money which would be used in a settlement.

Absolutely insane


So even assuming the lawsuit has no merit: They lose $8M on $64M rev, and investment bankers think this is ready to take public?

The bubble is back! My options are going to make me rich!

(with apologies to whichever poster copyrighted that phrase.)
JeffChetin 12/5/2012 | 3:37:35 AM
re: Optium IPO Rolls On Deauxfus,

"prospective buyers would have to be barking mad to jump into a new issue with the threat of actual an treble damages looming overhead"

What? Have you seen the amount you are taking about here?

Next, you will probably start arguing with whyiswhy about teenage driving rights.

"barking mad", would be the bozo that buy JDS after their reverse split. Nothing more exhilarating than catching a falling sword.
deauxfaux 12/5/2012 | 3:37:32 AM
re: Optium IPO Rolls On Jeffcretin

You said: "barking mad", would be the bozo that buy JDS after their reverse split. Nothing more exhilarating than catching a falling sword."

Stay on point. My posts have nothing to do with JDSU's business, buying shares of JDSU, etc.

"Why" and I weren't arguing. We were on the same side of the argument with another poster. Perhaps you should review "hooked on phonics" and re-read the posts....if you can.

Yes, I have seen the amounts. Sounds to me like $5-10M in actual damages potentially, meaning a total of $20-$40M including treble damages if the infringement is willful. Legal fees on top of that over the lifetime of a suit are usually in the $5M range. Interest could make the total larger yet. That is material

Sounds to me like you are either an Optium employee, or another one of the moronic refugees from the yahoo message boards. In either case, you are up way past your bedtime.
Pete Baldwin 12/5/2012 | 3:37:22 AM
re: Optium IPO Rolls On Just for posterity: JDSU did undergo its 1-for-8 split today. Shares are down 35 cents (2.1%) at $16.25.

To be fair, it looks like most tech stocks are down today.
deauxfaux 12/5/2012 | 3:37:21 AM
re: Optium IPO Rolls On Just normal volatility. I don't think it will trend downward because of the R/S...unless earnings tank
Balet 12/5/2012 | 3:37:16 AM
re: Optium IPO Rolls On It almost looks like JDSU hired a bunch of "famous" Corning lawyers of 1999-2000 and is suing left and right:)

They just killed a pretty nice and inexpensive Metconnex product to aquire it for pennies. I believe they will have more difficult time crapping Optium.

It is a shame that deeds like are allowed to hurt the whole business and consumers at the very end.

Metconnex had better WSS than JDSU and was selected at a major system OEM, while JDSU was thrown out. It is a "good" way to compete. Now JDSU is going to charge the same prices for Metconnex products as they charge for their MEMS WSS. Ya-hoo JDSU!!

deauxfaux 12/5/2012 | 3:37:13 AM
re: Optium IPO Rolls On I think you have to blame Ortel/EMKR on this, as they are the guys really filing the lawsuit. JDSU is just along for the ride because of the licensing agreement between the companies.

This is certainly not death for Optium, although Ortel/EMKR intends to get a few pints of blood out of this.
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