I have not seen any real analysis here, so I offer mine for feedback:
Feel free to comment.
Upside:
Smith and Deshpande know how to play Wallstreet. When their
propaganda department says "jump" the analysts and
investors seem to ask "how high" without asking any other
questions.
The have a SUPERB marketing group.
No doubt they have a good team to produce a good product.
They have people capable of selling in the carrier space.
There is much hype based on past reputation and the people coming from Cascade.
The deployment of WDM is early and is going to grow.
Cerent and Mont got huge buy prices via Cisco, thus setting
outrageous standards that could translate into sky high
evaluations.
Cons:
WDM market is not yet mature, and in many cases not yet
cost effective. How fast and how much will it grow?
Unlike Cascade, this space they have entered is VERY
crowded. Unlike Cisco with Mont and Cerent they do not have
complete solutions with an installed customer base.
They are, in a sense, going head up against CISCO and LU
etc...
At this time, there are at least 35 to 40 other companies
in the US playing in the WDM place, this includes several
startup and established companies focusing on the exact
same WDM transport market that sycamore targets.
They have no real product nor cash flow. The Williams deal
is nothing more than a gentlemens' agreement to buy over
the next few years the system they "threw" together
in the rack with what they have at this point. Again, this
is good marketing to make the company seem
solid before an IPO.
Most of the stock is held by very few individuals and not a
varied board of trustees. They cannot offer
shareholder accountability and unbiased market insight.
Unlike Cascade was, they are not directly associated with the internet.
Overall:
Is sycamore a gamble? Yes.
Is sycamore a sure bet to succeed? No.
Am I going to gamble and own some? Yes. |
