Mentor or EDA Industry – Who is to Blame?
Mentor’s woes with Carl Icahn may stem from a misunderstanding of the complicated EDA market rather than the company’s financial condition.
The local paper – the Oregonian – has been dutifully reporting on Carl Icahn’s noisy financial challenges to Mentor Graphics: Casablanca Capital sides with Carl Icahn, castigates Mentor Graphics
An important element in this ongoing challenge is that, until yesterday, Icahn never really offered to buy Mentor at $17/share – a point that Wally Rhines recently confirmed. Rather, Icahn said that “if” he were to buy Mentor, then he would pay that amount. This minor clarification is important since no one has stepped forward to buy Mentor, which means that Icahn has no quick way of exiting the Mentor mess.
I would argue that, in terms of value to the investors, Mentor is no better or worse than Cadence or Synopsys. The challenge to investors is the EDA market, which is a very different beast from, say, the Internet or video rental businesses. (Both Yahoo and Blockbuster were past Icahn purchases.) This is the mistake that I believe Icahn is making, i.e., not understanding the market.
[This is part of an ongoing discussion on Facebook.