Needham & Company Maintains a 'Hold' on Sigma Designs (SIGM); Announces Bid to Acquire Trident's DTV Business Unit
Tweet
Share
E-mailGet Alerts SIGM Hot Sheet
Price: $0.14 --0%
Rating Summary:
1 Buy, 4 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
1 Buy, 4 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Join SI Premium – FREE
Needham & Company maintains a 'Hold' on Sigma Designs (NASDAQ: SIGM).
Analsyt, N. Quinn Bolton, said, "SIGM announced a “stalking horse” bid to acquire the assets of Trident Microsystems’ DTV Business for $21MM plus the assumption of certain liabilities. Despite management’s expectation that the acquired business would be EBITDA positive in the first year of operations after the acquisition, we expect a cool reaction from investors, many of whom appear to be already concerned by SIGM’s current rate of cash burn, as Trident’s DTV Business has incurred substantial losses over the past two years and as the transaction would further erode SIGM’s net cash/ share. Though we see the strategic rationale in combining SIGM’s home connectivity and IPTV media processor businesses with Trident’s DTV SoCs, we see some potential risks to the transaction: 1) aggressive competitive environment for DTV processors, 2) need to support two DTV SoC product lines (HiDTV Fusion and TV550 platforms) and 3) whether SIGM can reduce OPEX by enough to achieve profitability without sacrificing future product development."
For an analyst ratings summary and ratings history on Sigma Designs click here. For more ratings news on Sigma Designs click here.
Shares of Sigma Designs closed at $5.58 yesterday.
Analsyt, N. Quinn Bolton, said, "SIGM announced a “stalking horse” bid to acquire the assets of Trident Microsystems’ DTV Business for $21MM plus the assumption of certain liabilities. Despite management’s expectation that the acquired business would be EBITDA positive in the first year of operations after the acquisition, we expect a cool reaction from investors, many of whom appear to be already concerned by SIGM’s current rate of cash burn, as Trident’s DTV Business has incurred substantial losses over the past two years and as the transaction would further erode SIGM’s net cash/ share. Though we see the strategic rationale in combining SIGM’s home connectivity and IPTV media processor businesses with Trident’s DTV SoCs, we see some potential risks to the transaction: 1) aggressive competitive environment for DTV processors, 2) need to support two DTV SoC product lines (HiDTV Fusion and TV550 platforms) and 3) whether SIGM can reduce OPEX by enough to achieve profitability without sacrificing future product development."
For an analyst ratings summary and ratings history on Sigma Designs click here. For more ratings news on Sigma Designs click here.
Shares of Sigma Designs closed at $5.58 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Coherent (COHR) PT Raised to $420 at Needham
- Needham Reiterates Buy Rating on WhiteFiber Inc (WYFI)
- Nu Holdings (Nubank) (NU) PT Raised to $19 at Needham
Create E-mail Alert Related Categories
Analyst Comments, Mergers and AcquisitionsRelated Entities
Needham & CompanySign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
