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Will CoSine Get Carved Up?

The outlook is still uncertain for troubled equipment company CoSine Communications Inc. (Nasdaq: COSN), although one analyst believes that the company could still be a viable acquisition target.

The last few months have been tricky for CoSine, to say the least. The first signs of trouble emerged back in July when the company announced it was examining "strategic alternatives" after a poor second quarter (see CoSine: The Big Sell-Off?).

Since then, Ernst & Young stepped down as CoSine’s auditor and the company laid off most of its employees (see CoSine: E&Y Says Bye-Bye and CoSine Cuts to the Bone).

Then, last week, CoSine announced that it that it had signed an agreement for the early termination of the lease on its Redwood City, Calif., headquarters. The company also released its third-quarter results, posting a net loss of $14.6 million, or $1.47 per share (see CoSine Posts Q3).

But it’s not all doom and gloom; CoSine ended the quarter with $33.6 million in cash. Kevin Mitchell, analyst at Infonetics Research Inc. believes that this could make the company a viable target.

Read the whole story at NDCF.

— James Rogers, Site Editor, Next-Gen Data Center Forum

drone387 12/5/2012 | 1:07:16 AM
re: Will CoSine Get Carved Up? Or is $30M too small?
rbkoontz 12/5/2012 | 1:07:15 AM
re: Will CoSine Get Carved Up? Yes, Cosine is the perfect acquisition target by Zhone having completed several similar deals recently. Zhone buys a company that is losing money like cash on fire for less than or equal cash value. Since no sane financier would in their right mind give Zhone more money after they have squandered almost $600M, this is their only avenue to raise new capital. This is sick and twisted.

What is amazing to me is that the investors in the acquiree actually accept the Zhone offer and their promise of turning their under water shares into gold. The right thing for our ill industry is to simply shut down these companies and give the money back to the remaining investors. Only when most of the money losing vendors go out of business is the health going to finally return to the telecom vendor market - and the component food chain as well...
Upside_again 12/5/2012 | 1:06:43 AM
re: Will CoSine Get Carved Up? Last solider has finally died. No one can or will make this venue a success. The tribe has proven and spoken.
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