Transmeta: A Bargain at $400,000
by John Paczkowski
Posted on November 17, 2008 at 5:55 PM PT
The buzz surrounding Transmeta Corp. reached a new high Monday night when the company’s 13 million-share initial public offering was priced at $21 a share, raising at least $273 million for the company in one of the hottest IPOs seen in many months.”
$255.6 million in cash seems like a small price to pay for the “Most Important Company in Silicon Valley.”
But that’s what semiconductor company Novafora will spend to acquire Transmeta (TMTA), the fallen chip design venture that was awarded the heady title a decade ago by the now defunct Upside. Actually, Novafora is spending next to nothing for the company, since Transmeta had $255.2 million in cash, cash equivalents and short term investments as of September 30. And it’s debt-free to boot.
A pitiable end to a company that helped calibrate the bubble-era Silicon Valley hype machine. Although we’ll certainly be hearing quite a bit more from Transmeta’s investors in the months. Presumably, they’re not too happy about the company and its patent portfolio being sold off for just $400,000.
A decade ago Transmeta was one of tech’s most talked about stealth start-ups. And for a time, its low-power Crusoe processor was something of a celebrity in the semiconductor world. But ultimately, Crusoe just wasn’t able to hold its own against competing chips from Intel (INTC) and AMD (AMD). And after a string of nasty financial losses, the company left the processor manufacturing business in 2005 to focus on intellectual property licensing. Sadly, Transmeta wasn’t able to find success there, either. In the end, it proved to be little more than a dim reflection of the fantastical company its hype machine created.
“We believe the technology has been over-hyped, and that Intel is fighting back with improved products,” Piper Jaffray analyst Ashok Kumar said in November 2000. “So the question is, will Transmeta end up with an ‘Intel Inside’ tread on its back?”
Seems Kumar’s finally gotten his answer.
