Major shareholder gives thumbs down on Actel’s Flash business
Actel’s third largest shareholder, Ramius, sent a letter Wednesday to that company’s chief executive, John East, as a follow up to a meeting they had Oct. 21 at Actel’s headquarters which Ramius partner Jeffrey Smith said “was extremely helpful to us in gaining a better understanding of Actel, the challenges it faces, and the future opportunities it hopes to capture. We look forward to continuing our dialogue with you and your senior management team.”
The letter then got down to business. Ramius believes (no surprise here) that Actels’ stock “trades significantly below its intrinsic value.” (What investor doesn’t?) The reason: “substantial losses” from the company’s Flash business. Ramius estimates that Actel’s total investment and losses combined in the Flash business at nearly $300 million, which exceeds the companies current market value, which was about $236 million at the markets close Thursday.
The investment firm suggested that Actel look at three alternatives: reduce expenses in its Flash business or establish a joint venture with a large competitor; or sell it.
In a filing today, Actel said it “welcomes the views of all of its shareholders and will carefully consider the suggestions outlined in Ramius’ letter.”
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I worked at Actel many years ago, and Actel is what it is. It’s not trying to take over the world. The stock never split, even in during the dot-com boom. The stock is trading at around the same level it was when I joined, and when I left. That was in the mid-90s. The only thing different is that there are a couple-hundred more employees now versus when I worked there, which explains the recent layoffs. Anyone who wants to buy Actel stock should look at the history of the company, and if you don’t like what you see, stock-wise, then don’t buy. Complaining after the fact only makes you look stupid.