Synaptics (SYNA) down $2 pre-opening

Touchpads for PCs were about 1% light relative to consensus revenue estimates, offset by higher mobile touchpads. On the conference call, Synaptics gave lower gross margin guidance relative to consensus. They said they'd decline slightly to 40%. The street is at 41%. The reason cited was new program implementations (mobile phone touch pads) that presently carry higher costs. Operating expenses were also guided a little higher due to increased legal expenses. Lastly, 1/3 of their $150mm cash is trapped in the auction rate securities market... which I view as non-operational and not a reason to sell as long as it doesn't impact their ability to do their core business.

I like it on weakness but I'm so glad I've been telling you to sell at $34.