GSI Technology IPO

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(Update 21Mar07) The revenue and net income for past 12 months are $50 m and $7 m respectively, according to IPOHome.  

I received this IPO offer from WR Hambrecht today. Since Xinhua Finance Media (XFML) turned out to be cold, I will be more careful here. Luckily I don’t see JP Morgan on the underwriter list. Besides Hambrecht, I saw Needham, Robert Baird. Both are respected regional investor bankers. A bit about the GSI tech, “The Company develops and markets Very Fast static random access memory products that are used primarily in high-performance networking and telecommunications equipment.”

It has about $47 m sales in 9 months fiscal 2006. According the price of $ 8 per share, 27 m outstanding shares, we can say roughly the price/sales ratio will be 4 or 5. Their customers include Cisco and Huawei. It seems to me the networking equipment is hot again. After 6 years finally we used up all the bandwidth built in dot com era. Now we need something new. That’s one reason Cisco has done well lately.

For comparison purpose, I can think of Fuwei Films Holding (FFHL). This is purely from the size of IPO, note they are in different industries, thus different growth potential etc. The Fuwei stock did very well shortly after IPO before going back to the earth (about $8.28 the offering price as of this writing). I will read its prospectus before call my broker. The IPO will be done in the week of March 26. 

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