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April 17, 2006
There's an alien in my wallet, part II
Obviously, Justin's right about one thing: It's just not soup yet at Alien Technology Corp. But here's where we differ: I'll bet the price of one share that this deal gets pulled or the company gets sold before any IPO happens.
I look for Alien Tech to become the latest proof point of my case that the IPO market, post-boom and post-bust, is a highly rational and only slightly risk-averse beast. I can't recall the last tech company that looked this much like a story stock to get its deal done. (I think Vonage is probably for sale too, which is why I don't agree with Justin's implicit assumption -- J, am I inferring too much? -- that Vonage's filing or Alien Tech's means a lot of risk is back in the market). Maybe Freescale, which wasn't very profitable but was much bigger than Alien Tech. But this company is nowhere near as close to significant profitability as companies such as Salesforce.com, VistaPrint and other IPO candidates that have done well.
I know, I know, it's RFID and RFID is sexy. Justin has a point there. (That's why I was going to blog this first, before he got off his duff faster than I got off mine...sniff). But that gets you as far as a private sale. Security software was sexy in 2004 too, but that didn't make Brightmail an IPO: It sold out to Symantec. Online advertising was sexy in 2004, but Advertising.com sold to Time Warner before the deal and Claria held off. All of those were stronger, more profitable companies then than Alien Tech is now. I just don't see anyone in the public venture capital business these days. Not in IT anyway -- maybe in biotech. And accepting that you are in the public VC business is the kind of leap Alien Tech still requires.
Bottom line: Wall Street may be selling this weak stuff, but it doesn't mean much of anyone is buying. In basketball terms, you can drive the lane all you want, but if you ain't a playa your layup is still going to be dispatched into the second row. In this case, judging from the numbers, maybe the third.
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Hello Tim, I like most of your posts and read them frequently but I must say, you lost it on this one??.Not to be rood but, I gather from your post you have not done your homework on rfid or alien technology. This company alien has a (fsa) technology that whips out rfid tags at the tune of 2b per year with their two manufacturing facilities now. I think you should actually read their website??.Look at who?? on board, who has has plowed their way in for reselling alien?? products and read their news and press releases - look at the big picture here??.FSA??I believe this fsa technology will eventually meet the world demand for tags. There is no other company in the world that can even come close to manufacturing the types of volume this company puts out. But, I truly believe we will need many alien technology manufacturing plants and other companies manufacturing plants as well to accommodate the world's rfid demands. From my research on rfid - the problem now is that with all the companies in the world working together to manufacture and standardize tags and readers combined (the DOD & Wal-Mart standard) - they cannot produce enough tags and readers fast enough for the demand right now. This will be trillions of tags per year I believe. This is an issue for rolling out thousands of companies with thousands of products at the same time. It will take time - but if alien goes public I think we will see huge institutional money flow in, see the stock sore and see more alien manufacturing facilities being built. Being a small investor I personally will be purchasing this stock as an investment as well as other rfid companies as they become public. I think this technology WILL be as big or bigger than the Internet revolution and any big institution or investor that sits back on the sidelines and doesn?? get in will be saying down the road, would of, should of, could of.
Posted by: TH at April 23, 2006 02:39 AM
You are probably right - Alien's numbers are one of the worst IPO I've seen ever... It's not just the market, but also how you run the company.
Alien is also not considered the best in the field, SmartCode announced they'll IPO either in 2006 or 2007 and Impinj is also trying.
Alien is a nightmare for investors - waiting for the better IPOs makes a lot of sense if you want to make money and not to loose it !
Posted by: Rob at May 11, 2006 09:19 PM