MSPD
The Future of the NPU Market - Part 1
Tthere are parts of the NPU market that will do well and others that will not. The edge of the network, with its burgeoning application growth, provides a fertile cradle for the NPU model while the core network is so harsh an environment that even the best managed companies face long odds of generating superior investment returns. Let’s examine why that is.
Vitesse Sells Storage
After dropping hints in an earlier conference call (see Vitesse Q207 Conference Call Notes) Vitesse announced the sale of a portion of their storage products to Maxim (MXIM). The $63M transaction has a provision for an additional $12M if certain milestones are hit. The company will use the proceeds from Maxim and $30M in new convertible debt to repay the junk debt to Tennenbaum Capital. (see Tennenbaum and Vitesse).
Three months ago I expected the sale of the entire storage unit to fetch 3.5x revenue. Subsequent research and discussions led me to believe this estimate was inaccurate, something reflected in comments I made (see here).