Why do you think Sirit will be bought in an asset sale?
Currently there are too many manufacturers of RFID readers. RFID readers are analogous to laptop processor chips. There are two primary chip makers in the market today – Intel and AMD, and couple boutique firms. There used to be a lot more. Sirit is likely to be bought because they have very good technology that works globally and their low stock price makes them a bargain. The revenues dropped by 20% year-over-year ($24 million in 2007 down to $19 million in 2008) despite the automatic vehicle identification industry growing. This points to Sirit not being the dominant player in the industry that makes up 2/3 of their revenue. Unless they start making solutions that can be sold in other industries they are a player that is ripe for the picking. If they wait too long and run out of cash or can’t raise more it will be in an asset sale.
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