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Entropic Communications
www.entropic.com
(Nasdaq: ENTR)
Scheduled for Dec. 3
$765.9 million post-money valuation

In this day and age, we have so many machines—televisions, computers, telephones—to keep us entertained, but there is an increased desire for devices that have content compatibility, which isn’t easy. That’s where Entropic Communications comes in.

The company designs semiconductors to handle multimedia home networks. It’s a fabless semiconductor company, which means that another company handles the manufacture and distribution of the chips. This reduces Entropic’s capital requirements. Because semiconductor equipment isn’t cheap, the outsourced manufacturing more than makes up for the loss of operating control that goes along with it. In April of 2007, Entropic acquired RF Magic, which had a complementary portfolio of home networking products.

Entropic’s semiconductors are purchased by electronics manufacturers to put in televisions, digital video recorders, modems and other devices that pull video from coaxial cable. In 2006, Entropic and RF Magic combined drew 31% of their $67.7 million in revenue from Actiontec Electronics, Inc., 23% from Motorola, Inc. (NYSE: MOT) and 11% from CalAmp Corp. (Nasdaq: CAMP). This customer concentration forms one risk, but that’s less worrisome than the risk of cable companies and customers standardizing around a competing home networking technology, such as Ethernet, xDSL, or WiMax.

Neither Entropic (founded in 2001) nor RF Magic (founded in 2000) is profitable, which is no surprise given the early-stage nature of the underlying technologies. The combined companies raised more then $124 million from five different venture capital firms. None of these are selling shares on the IPO and they’ll control 36% of the company after the IPO, which values their stakes at $275.7 million. Some shareholders, including some managers and small venture firms, are selling all or part of their holdings in the IPO. Most of the proceeds will go to general corporate purposes, keeping the company going until its products catch on and it stops losing money.

CalAmp Corp. (Nasdaq:CAMP) slid 7.69%, or $0.30, to $3.60 in after-hours trading Wednesday after the provider of wireless communications products lowered financial guidance for the fiscal 2008 first quarter ended May 31.

The Oxnard, Calif.-based company said it anticipates a first-quarter pre-tax charge of $16 million, or $0.41 per share, due to a previously disclosed product performance issue with a Direct Broadcast Satellite customer. As a result, CalAmp said it now expects to record a net loss in the range of $0.47 to $0.49 per share for the first quarter. In May, the company said it expected a first-quarter net loss of $0.06 to $0.09 per share.

Two analysts surveyed by Thomson Financial estimated a loss of $0.07 per share for the first quarter.

CalAmp previously disclosed that certain products shipped by CalAmp to a key DBS customer during calendar years 2004 to 2006 experienced a field performance issue as a result of the premature deterioration of printed circuit board laminate material provided by another vendor.

Not all that long ago, the term wireless applied specifically to voice communications. But as is understood by anyone who has discovered the texting feature on their cell phones, the global positioning systems in their cars, or attends company conferences remotely from a laptop in their local Starbucks, wireless voice technology today is just one of a multitude of wireless applications.

The term wireless in the year 2007 applies to the transmission of voice, video and data and covers a long and growing list of uses from accessing the Internet over a handheld device to preventing theft of truck cargo by implanting a GPS device in the trailer. Quite simply, the industry is booming.

Wireless technology helps corporate executives work more effectively on the road, keeps blue collar workers more efficient in the field, and is providing a lot more entertainment options for the living room, the car and the daily subway commute.

The sheer number of wireless devices and applications as well as potential users makes it difficult to even measure the size of the market.

One good statistic is that consumer spending on wireless technologies is projected to exceed spending on wireline, or fixed wire services by the year 2010. And anecdotally, there is growing evidence that more and more consumers prefer using their cell phones for text and entertainment data than to talk. That shift is spurring demand for new wireless technologies.

All the companies that years ago made money selling traditional land-line telephone equipment today are pouring resources into wireless networks, and in recent years many of these industry giants have grown even larger through mergers and alliances. France’s Alcatel merged last year with Lucent Technologies – resulting in Alcatel-Lucent (NYSE: ALU) -  while Nortel Networks Corp. (NYSE: NT) formed a partnership with Microsoft Corporation (Nasdaq: MSFT) to build wireless technologies for corporations. Cisco Systems, Inc. (Nasdaq: CSCO) has increasingly been investing in Internet gear to allow for the delivery of voice, video and data to wireless devices, and Motorola Inc. (NYSE: MOT) is actively acquiring smaller businesses that make technologies to enable wireless communications.

Oxnard, Calif.-based wireless products provider CalAmp Corp. (Nasdaq: CAMP) reported after Thursday’s close that net income in the fourth quarter was $0.73 million, or $0.03 per share, compared with $3.5 million, or $0.15 per share in the fourth quarter of fiscal 2006.  Analyst Oppenheimer & Co. responded by downgrading shares to “neutral” from “buy”.  The stock has lost $0.08, or 1%, to $7.82.

Shares of Dendreon Corp. (Nasdaq: DNDN) are rising despite news during trading on Thursday that the Seattle-based biotechnology company is delaying the release of its prostate cancer drug Provenge until 2008.  Dendreon has also reduced its headcount by 15%.  Shares are up $0.39, or 7%, to $6.38.

Trump Entertainment Resorts (Nasdaq: TRMP) said after the close that it had received indications of interest from parties proposing to purchase the company. In after-hours trading, shares were up 10.48% at $14.44. The company had previously announced in March that it had engaged Merrill Lynch to assist it in seeking strategic options. Atlantic-City, New Jersey-based Trump Entertainment owns and operates three properties, and is separate from chairman Donald Trump's other real estate and holdings. Market capitalization of Trump Entertainment was slightly more than $400 million.

Sonic Solutions (Nasdaq: SNIC) was lower in after-hours trading after announcing partial and unaudited results for its fourth quarter ended March 31. Sonic said net revenue was $38.1 million, compared with the average analyst estimate for $38.4 million. The company, which continues to review its options program and other accounting practices, said net revenue for the first quarter was expected between $33.0 million and $35.0 million. That guidance was below analysts' expectations for $36.9 million. Novato, Calif.-based Sonic Solutions, a digital media software company, was last quoted in after hours trading at $12.52, down 6.36%.