Newport Beach-based contract chipmaker Jazz Technologies Inc. needs to double in size, either by buying another company or being bought, the company’s chief financial officer told analysts this week at Roth Capital Partners LLC’s stock conference in Dana Point.
The thinking is behind Jazz’s hiring of an investment banker to pursue its options, Pittman was quoted as saying on investor Web site Seeking Alpha.
“The key to unlocking value is to double the size of the company,” Pittman said. “It’s so important, whether we acquire someone, or we are acquired.”
With Jazz’s shares trading at about $1 at a recent market value of $20 million, “It’s likely that we will be acquired,” he said.
Earlier this month, Jazz hired UBS Securities LLC to look at “various strategic alternatives.”
Jazz makes silicon wafers, the building blocks of chips, for other companies. It has seen its stock fall by roughly 75% in the past year as it struggles to find its place as a U.S. contract chipmaker in an industry dominated by big Asian rivals.
The company got its start as the chip making arm of Rockwell International Inc.’s semiconductor unit, which made chips for modems.
Rockwell spun off the business as Newport Beach-based Conexant Systems Inc. in 1999.
In 2002, Conexant split off its Newport Beach chip factory as Jazz Semiconductor.
Last year, Apple Inc. alums Gil Amelio, Steve Wozniak and Ellen Hancock bought Jazz after raising money from investors in 2006.
Amerlio runs the company as chief executive.
“The company was losing money when we took over last February,” Pittman said. “Since then, it has become profitable. We are a positive cash-flow company, though the stock market hasn’t rewarded us for that.”
*For more on this story,
read the full Seeking Alpha article.
