Clearspeed Technology Share Discussion Threads

[tradx666] 21/11/2004 19:55

Judgement,

You are of course correct, but they need and early adopters, and the packages you state cover almost 60-80% of the HPC sector!!

regards

T..

[judgement] 21/11/2004 14:44

They don't have a double precision product until early Q2 05, so no real customers or sales until then.
They've been talking to numerous potential customers; mainly to find primary directions for their application effort. They seem to show most success in areas where the calculation is intensive in relation to data throughput. Main application areas seem to be financial institutions for monte-carlo analysis, contour fluid dynamics, finite element analysis, and general mathematical simulation in military and aerospace.

[tradx666] 19/11/2004 20:36

2K,

everyone and their dog is a Sun grid partner, so don't put too much reliance on this, but as C says, I too hear that they are real close to Cray, I have also heard that they are playing/talking to IBM, but that is gossip rather than 'firm'...

I also know that they are talking to some 'channel' companies that do exceptionally well in the HPC market..

regards

T..

[ch8rlie2000] 19/11/2004 17:25

2k,

From what I can gather, they are a grid partner of Sun, Cray have/will(?) use the chip in their XD-1 platform and there's an ongoing relationship with Lockheed Martin. Anyone know of any others?....

Would love to hear some news from the Company in this respect.

C...

[2kpromoe] 19/11/2004 13:21

Hi all, recently bought into this very promising compnay and still doing research on it. Would anybody happen to know has the compnay got any clients in the bag already or indeed anybody greatly interested in the product? Very strong and stable shareholder base looks very promising and the tie up with IBM looks a very very positive sign.

[ch8rlie2000] 19/11/2004 08:35

T,

Yeah, I thought we'd get something from Supercomputing aswell...... Glad to see the share price didn't suffer when none arrived. Hopefully that means that when it does come it will have a positive effect.

I still believe that they will be bought by one of the majors at some point. My view is that this will have to happen sometime within the next 12 months or they will become too expensive.

C..

[tradx666] 19/11/2004 08:20

C,

Good to see another here! I was hoping for some news to filter back from Supercomputing in the US, but alas none :-(

Still, I'm sitting tight for the time being, I'm on a tidy profit and I do expect commercial news in the not too distant future..:-)

regards

T..

[ch8rlie2000] 15/11/2004 17:13

Not just you T, I'm in ..... big and for the duration.

Regards......C

[tradx666] 13/11/2004 10:20

well, well well, new star reduce and it still manages to hold and gain a little - this says volumes for the tight market and the demand...but it looks just me playing here..never mind, I always seem to be finding these gems on my own lately!!

regards to all lurkers

T.....

RNS Number:0940F
ClearSpeed Technology plc
10 November 2004

ClearSpeed Technology plc

Holding in Company

The company today received notification from New Star Asset Management Limited
that its client, New Star Hedge Fund Limited, no longer has a notifiable
interest in the Company.



This information is provided by RNS
The company news service from the London Stock Exchange

[tradx666] 09/11/2004 20:39

Looks like some profit taking has begun...not surprising given our gallop up! I shall await a little longer, at least until SC2004 is over, as I still expect some news to break...we will see, as always!

Mind you, I ain't gonna let that 100% get much smaller! LOL

Be lucky.

[tradx666] 05/11/2004 09:18

Hi all,

Those that are already I hoped would appreciate the charts and the small overview news bit..the news bit which I expect to see get very exciting soon.

regards to all

[tradx666] 04/11/2004 20:29

Aldric,

a pleasure..

I expect solid tangible news sooonnn...:-)

regards

T..

[aldric] 03/11/2004 09:02

Good volume, breaking out again.

Well done on this one tradx :)

[chester] 03/11/2004 09:01

bought a few today

[ch8rlie2000] 01/11/2004 10:01

Tradx666,

With the SC2004 show happening next week, what would be your guess on the announcement of an OEM deal with Cray?

The way I see it is that Cray will be using the CSX600, so its just a matter of when this will be announced. As you said it would make sense to announce during the show.

[tradx666] 19/10/2004 09:24

elliotset,

Blimey, I've only just started that rumour! (can't see it myself yet - they still have too much to prove imho).

I think it is more likely that they will shortly be announcing an OEM deal...It's the supercomputing 'show' soon in the US..I wouldn't mind betting that they have something in the wings for then..

We will see.

Be lucky.

[taylor20] 18/10/2004 11:51

At this stage I can't see a takeover being in the best interest of the employees or directors. Reading through the float prospectus reveals that together they hold well over 50% of the shares, so I would suggest that a bid would have to be at a significant premium to the current share price.

But stranger things have happened!

[elliotset] 18/10/2004 11:41

that rumour looking good , could it be the takeover we have been talking about

[tradx666] 12/10/2004 09:43

Ch8rlie2000,

I've given it alot of thought already, and of course there is a list of the normal suspects..i.e. Intel,AMD,Cray,Sun,SG,IBM..all who are in some or another involved in the HPTC business..but I tend top to think that the answer could be more left field, maybe TI or a small player like Myricom, or perhaps even Apple..

The good news all could buy and all could do with it..my own 'guess' would be a choice between Sun (they need to cement their position in the clustering space, they are almost 'just' an AMD reseller now), AMD themselves - it could get them into the lucrative comms area's which they don't reach and of course IBM, who may well see what could be achieved with this from a GRID/mesh perspective..

Either way, there are some decent candidates.

[ch8rlie2000] 12/10/2004 09:29

T...

Good article ...... I think its fair to say that CSD must be in a similar position and represent an attractive aquisition to a number of suitors. However, when that might be is the question?!

Any feelings on who could fit the frame as a potential future buyer?

C

[britishbear] 12/10/2004 09:10

Semi's being hammered across the board - lucky CSD has not been hit "yet" - fairly sure it will be though - got to be a profit taking opportunity and then a buy back.

[tradx666] 11/10/2004 17:44

Interesting article..

By Bipin Parmar

The recent acquisition of Alphamosaic by US-based Broadcom for $120 million and a cash payment of $2.7m highlights the fact that fabless startups still represent one of the best opportunities for HNWIs (high net worth individuals), Angels and VCs. The Chilli published a detailed due diligence report about Alphamosaic in June 2004. Here, we examine this deal and provide a perspective on the lucrative fabless semiconductor sector.

Broadcom's acquisition of Alphamosaic values the deal at $120.3 million. It will acquire all outstanding shares and stock options, and as usual a portion of these will be held in escrow for 18 months. Broadcom will issue 4.17 million class A common stock valued at $28.86 on September 17, 2004. It will also issue 140,000 shares as a replacement for existing stock options and incentive plans. Alphamosaic currently employs 57 people, mostly in Cambridge, UK, and will join Broadcom's existing r & d staff, dealing with DSP architecture, compilers and embedded software, also in Cambridge.

Broadcom is well known for its growth strategy via acquisition from its inception in 1991, when it was a networking company, and branched out into the fabless model for set top boxes (STBs) and modems. In the year 2000, at the height of the tech bubble, it had acquired 12 new companies, including Vision Tech, which dealt with STBs, and SiByte. At that time Broadcom's share price was a giddy $250 a piece. It has taken a while for it to overcome this indigestion, when it took a massive write-off of $1.76 billion to repair its balance sheet. With a revenue base of $1.6 billion in 2003 and earnings of $151.7 million as measured on a US GAPP basis (on a non GAPP basis it declared a loss of $ 540 million), Broadcom has gone through some recent changes. These include the resignation of co-founder Henry Nicholas as CEO and appointment of industry veteran Lanny Ross as the new CEO; Henry Samuel, the other co-founder, still remains with the company as CTO and co-chairman.

Alphamosaic was a Cambridge, UK-based post-Chilli R3 fabless chip startup. It was founded in April 2001 as a spinout from Cambridge Consultants Limited (CCL).
Alphamosaic had developed an integrated multimedia processor with embedded software and tool set. Its product was targeted primarily at high end mobile feature phones which enable multimedia messaging (MMS), video, audio and polyphonic ringtones. The company had been on its second generation product and was in the midst of design wins with several customers in Asia, with Samsung already signed up as a tier one volume customer.

A healthy IRR for the original investors

Before the acquisition, Alphamosaic had raised a total of $31.4 million (£16 million) from Prelude Trust, ACT, TTP Ventures and Doughty Hanson, in the now familiar classical milestones as defined in The Chilli benchmarks and definitions.
2001 Chilli S3 $ 2.9 million
2002 Chilli R1 $ 7.5 million
2003 Chilli R2 $ 12.0 million
2004 Chilli R3 $ 9.0 million

Total $ 31.4 million

In our opinion, $31.4 million represents an under-investment of $5 to $8 million for a post Chilli R2 company, representing the lower appetite for risk by European VCs compared to the US. Nevertheless Alphamosaic's acquisition at this level still represents a lucrative return for the original investors. It would have been an interesting scenario to see how much higher the returns could have been had Alphamosaic been able to capture a slightly bigger R3 round. It would have more time, bandwidth and runway space to garner a higher revenue and customer base, and hence better multiples. But we suspect with all the different constituents of investors and stakeholders, it is difficult to hold out when there aren't that many princes looking for their princesses.
Prelude Trust: does an early bird always catch the fattest worm?

Prelude, which started out in 1997 with a fund size of £21m and a further injection of £30 million at the height of the tech boom in March 2000, was an early investor in Alphamosaic with Cambridge Consultants. Its total investment in Alphamosaic of £5.1 million produced a return of £13.6 million, representing a respectable multiple of 2.7x. This figure has an upside potential after the escrow expires.

Prelude's GPs and LPs would be very pleased with the Alphamosaic results as it continues to adds more successful exits to its list, the most recent one being Fillfactory, where a £1.0 million investment at the beginning realised £10.6 million, a 10x return over a five year period (see our 'Summer investment fever' article - for more details on Fillfactory exits and when nCipher exited via an IPO). We expect that the good results will make Prelude open up its purse strings for more S3, R1 and R2 investments in the tech sector.
TTP Ventures, a small corporate venture fund, based near its parent company TTP in Cambridge, UK, had a return of 3.5x on its original investment of £1.7 million representing a fantastic IRR of 100 %.

Doughty Hanson, which co-invested in a Chilli R2 of $12 million and led the most recent R3 round $9.0 million in March 2004, less than six months ago, is also in line for a relatively healthy return for its short exit cycle. Another investor which also received good returns was ACT, an Irish VC tech fund, whose third fund raised 170 million euros in January 2003.

The Chilli perspective

A large fabless company the size of Broadcom needs to feed its massive infrastructure with new products and new markets. It already has product lines addressing the STB, modem and cellphone markets. Alphamosaic's acquisition, creates a further opportunity for Broadcom to address the high end multimedia and wireless handset market as well as leverage from its sales, distribution, customer service, support and supply side relationship with foundries, assembly and test houses.
On the other hand, Alphamosaic would have faced a whole gamut of growth related challenges, namely investment required to build a global sales, support, and supply chain, and would have been limited by some large handset makers' reluctance to buy from a young, small startup without a strong, stable, financial partner. There is never a right time for a fabless startup exit, as there are too many stars that are inter-dependent and unlikely to all line up at the same time – except when there is a blue moon.

The decision as to when to sell out is always difficult to call, as one never knows if a fabless company will run out of runaway (cash) before it is cash generative. On the other hand, being part of a larger organisation brings issues, structures and management processes which can act as a brake on the free innovative spirit of a startup. Whether waiting a bit longer could have garnered a better than the average 4x return is a difficult call, as the semiconductor industry is softening a little and overall investor sentiment could turn the other way very easily.

The other major beneficiaries from this exit will be Alphamosaic's 57 employees and original founders, who jointly owned over 20 percent of the stock. One just hopes that the lockup periods and restrictions are not too stringent, in order to justly reward the employees' efforts so far.

The acquisition also sends out the right signals to the marketplace, as this will re-trigger and renew interest in new and existing fabless startups in Europe. This region currently represents less than two percent of the world's fabless startups, partly due to regular acquisitions by US-based fabless companies and partly due to lack of good exit stories, role models, lack of early stage funding, misguided government policies and programmes.

Nevertheless, we believe that despite the handicaps there is ample talent, domain expertise in telecoms, wireless, digital consumer, health, transportation and the education sectors in Europe for a viable ecosystem and opportunities for fabless startups. We look forward to the day when Europe is able to sustain a startup that is equally on par with the likes of Qualcomm, nVidia, S3, Acer and Broadcom. It may just just take a little longer for a whole new generation to plough back some of the gains and put something back into the ecosystem.