Huawei and Adtran are perhaps the only consistently profitable companies as overall sales continue to fall. DragonWave, a microwave pioneer, couldn't overcome industry problems. Ex-CEO Peter Allen is one of the go-to people in mobile backhaul. He built DragonWave up to 150M in sales in 2015, although profitability has long lagged. Two years later, three-quarters of those sales are gone. Creditors forced the company into receivership. Allen and the other directors resigned.
James Bagnell has a thoughtful report on what happened. Half of DragonWave's sales had come through a deal with Nokia. They disappeared when Nokia bought Alcatel and switched to Alcatel microwave gear. Technical problems killed the company's sales in fast-growing India. Allen ran out of options for raising money for a comeback.
The remarkable success of Wi-Fi backhaul, especially Ubiquiti, is reducing demand for traditional microwave gear.
As I write this, Ubiquiti shares are up 16% on the day to a market cap of $5B. Their signature product uses Wi-Fi to reliably deliver bandwidth, at a cost maybe a quarter that of DragonWave and similar radios. Sales are going over 1B this year. Wi-Fi for backhaul is now a proven technology.
Thanks to Sean Kinney of RCR Wireless for pointing me to the Ottawa Citizen article.
DRAGONWAVE ANNOUNCES DIRECTOR RESIGNATIONS AND DELISTING FROM TSX AND NASDAQ
Ottawa, August 1, 2017 – DragonWave Inc. (TSX:DRWI)(NASDAQ:DRWI) (“DragonWave” or the “Company”) announces today that, effective immediately upon the appointment by the Ontario Superior
Court of Justice of KSV Kofman Inc. as receiver (the “Receiver”) over the business and assets of the Company, each of Peter Allen, Claude Haw, Cesar Cesaratto and Lori O’Neill have resigned from the Company’s board of directors. The Receiver has been advised that the Continued Listing Committee of the Toronto Stock Exchange (“TSX”) has determined to delist the Company’s common shares effective at the close of market on August 30, 2017. The Receiver, on the Company’s behalf, does not intend to appeal the decision. In addition, NASDAQ Stock Market LLC (“Nasdaq”) has issued a notice to the Company indicating its decision to delist the Company’s common shares and to suspend trading in the common shares effective at the opening of business on August 2, 2017, unless the Company requests an appeal of that decision. The Receiver, on the Company’s behalf, does not intend to appeal the decision. It is expected that the Company’s shares will remain suspended from trading on both the TSX and Nasdaq. All Court materials filed in the Company’s receivership proceedings are available on the Receiver’s website at: http://www.ksvadvisory.com/insolvency-cases/dragonwave-inc/. New contact information. All future enquiries about the Company and its activities should be directed to the Receiver. Contact details are provided below. Forward-Looking Statements
On behalf of DragonWave Inc. by KSV Kofman Inc. as receiver and receiver and manager of DragonWave Inc. For further information, please contact: KSV Kofman Inc.; Tel: 416 932 6031 (Andrew Edwards, email@example.com or David Sieradzki, firstname.lastname@example.org)