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Esme Vos is the founder of MuniWireless.com (www.muniwireless.com), the news and analysis website covering large scale Wi-Fi and LTE networks, wireless applications and hardware vendors. Esme is an intellectual property lawyer; she received her J.D. from Harvard Law School. Esme was Chief Legal... More
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  • Ruckus Wireless Disappointing IPO 0 comments
    Nov 16, 2012 11:17 AM | about stocks: RKUS

    Ruckus Wireless went public today at $15 per share, but instead of having a "pop", the price has gone below $15. Many investors believe the P/E ratio of 81 is too high and the market cap of around $1 billion is too rich for a company without a long track record of profitability, in a market that is consolidating (telecom equipment market).

    Because the company has no long track record of profitability, you would have to believe in several things happening: dramatic growth in carriers' deployment of WiFi networks, especially for offloading of cellular traffic; growth in sales in North America and Asia; turnaround in EU economic conditions. In addition, you would have to hope that the commoditization that has plagued other vendors of wireless equipment, doesn't happen to Ruckus.

    Sales cycles are very long in the market that Ruckus is selling into. Moreover, it is running into Cisco in many prospective deals with carriers and large institutions.

    On the low end of the market (ISPs that aren't carriers with deep pockets) it is running into competition from Ubiquiti (NASDAQ:UBNT).

    NOTE:

    I previously posted a longer article about Ruckus:

    Ruckus Wireless Prices IPO $13-$15, Big Risks Remain ...

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: RKUS
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