Merriman Starts Led Maker Cree (CREE) At Neutral

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10:11:56 am on August 4, 2008

This morning Merriman initiated CREE with a neutral rating indicating expansion remains a challenge.  The firm believes the unusual tie between the COTCO earnout and a related party supply agreement raises questions about the quality of revenue. The firm says LED Lighting Fixtures was founded by Cree’s former CEO and Chairman and bought for approx 50x sales, and the earnout is partially based on product development milestones. Both acquisitions compete with existing customers, and organic growth rates remain a question.

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