Others have suggested that Freescale's long term debt
obligations of roughly $6.5 billion weighted down the stock in the eyes
of investors. But Beyer said he didn't think that was a factor.
"The fact of the matter is that we do have a heavy debt load," Beyer
said. "We have made it crystal clear that we had more than enough
cash-generating power to pay down the debt. I don't think that had any
impact whatsoever on the past couple weeks. "
Beyer, noting that Freescale outgrew the semiconductor market in 2010
and the first quarter of this year, said the company has an exciting
future. "Today is an important milestone," Beyer said. "What's more
important is that Freescale is becoming a fine, fine company."
One thing that justifies valuation (remember: it is all about future potential!) of FreeScale it is doing right things in some areas of its product portfolios. For example, just in last year alone, they have shipped more Sensor products that what they did (in that segment) in the 25 years prior!
Dr. MP Divakar
Agree, not sure how the $7.5B dollars of debt and limited cash reserve will play into the equation for stock pricing with a company that has essentially been on life support in terms of manufacturing. The reality now is Freescale will need to have financial transparency to the market. In addition, post the buyout in 2006, all the executives left the company after the payout. Hope this is not a trend in 6 months when they can exercise their options.
No, simply put, 22-24 was too expensive for the state of the affairs that FSL is in. And investment banks knew it. I mean too expensive compared to peers (like NXP or TXN). The first day attracted day traders hoping for a quick gain like LNKD. And we saw at the close that the demand was thin and the sellers pushed down the price.
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