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Technology Stocks : Silicon Graphics, Inc. (SGI)

SGI 92.28

+2.4%

3:59 PM EST

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To: Bill Holtzman who wrote (1398)	5/10/1997 7:42:00 PM
From: Jeff Maresh	of 14451

Bill - I think I've got some big knowledge gaps about TJ but here are my opinions. Even last year I thought of him in quite favorable light and I still do, but not at the helm of SGI. He was with the company for 8 years and IMO he still has a small company mentality. I originally was disappointed to see him go and in hindsight I think it may have been for nostalgic reasons. This transition in mentality is difficult to breach for many good leaders. McCracken on the other hand comes from top management at HWP which of course is a very large concern. I think he is better equipped to take SGI to the next level simply since he has been exposed to "big company problems" that TJ might not have seen. I see TJ as a tactician and McCracken as a strategist and that governs the agenda one chooses. The turmoil that the company has been going through now for the past year appears to me to be the change in philsophy which if pretty dramatic. Its been my observation that if all competitors are tacticians, then there is an even playing field. If a strategist enters the arena, they usually eat the tacticians in the long run. For example I would consider Andy Grove (INTC), Bill Gates, and Jim Morgan (AMAT) strategists and look what their companies have done to the competition. I consider McNealy (SUNW) more of a tactician than a strategist but he does show signs of fence sitting. >Why do you feel Jermoluk had to go? Just because it was time to go to a different >tack or did you dislike his agenda? I didn't know about the hiring freeze but its a good sign. It an external sign that management is taking action to get costs under control. As I've stated in previous posts, I think its a bit unrealistic to expect big margin improvements in the next two quarters because there are all these new product rollout costs to deal with and production will not be as efficient as it will be 4 quarters from now. If they execute properly this quarter, their sales will be up and production will should be pushing product out the door pretty well with only perhaps minor glitches. Did you know a hiring freeze went into effect several weeks ago? Regards Jeff

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