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After Extreme Networks Inc., George Soros is Buying Exar Corporation

July 14, 2009 | About:
guruek

guruek

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(GuruFocus, July 14, 2009 ) Investment Guru George Soros is buying once again integrated circuit company Exar Corporation (EXAR). On July 2, 2009, Soros bought for his Soros Fund Management LLC 2,465,754 shares of EXAR at the price of $7.35 per share.

Exar Corporation designs develops and markets analog and mixed-signal integrated circuits for use in communications and video and imaging products. The company also produces digital integrated circuits used in communications products as well as general purpose analog integrated circuits. Exar Corp. has a market cap of $313 million; its shares were traded at around $7.2 with and P/S ratio of 2.7.

Soros has been in and out of this company before. He first initiated a position of 316,660 shares in EXAR during 3Q07 and increased to 857,376 shares in 4Q07 when prices of the stock took a tumble. Only then he was seen having exited the stock completely by 2Q08. Soros has never bought so many share before and his purchase on July 2, 2008 represent 5.67% of the total shares outstanding.

On May 14, 2009 , Exar Corporation reported financial results for its fiscal 2009 fourth quarter ended March 29, 2009. Net sales for the fourth quarter of fiscal 2009 were $23.9 million compared to net sales of $26.3 million for the prior quarter and $28.3 million for the fourth quarter of fiscal 2008. Net loss for the fourth quarter of fiscal 2009 was $4.6 million, or a net loss per share of $0.11, compared to a net loss of $63.8 million, or a net loss per share of $1.49, in the prior quarter, and a net loss of $172.4 million, or a net loss per share of $3.77, for the fourth quarter of fiscal 2008.

The Company ended the fourth quarter of fiscal 2009 with cash, cash equivalents and short-term marketable securities of $256.3 million, slightly less than the company’s total market value. Is this why George Soros buy the company.

About two week ago, we reported George Soros bought a position in another high-tech company, Extreme Networks Inc. (EXTR), and we questioned the rational behind the purchase.

EXAR is another money losing high-tech joint that Soros purchased in less than two weeks. Our question remains the same, why?

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Rating: 2.6/5 (16 votes)

Comments

bearuo
Bearuo - 5 years ago
Because Soros is not thinking about this ... Exar's market cap is too small. One of his underlings is calling the shots here.

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