To: Andy Chen (13578 )
From: noronha
Apr 12 1997 3:21PM EST
Reply #13594 of 15744
Andy Chen and ANYBODY INVESTED IN THE C-CUBE STOCK, THIS IS
IMPORTANT.
I have been a passive observer in this thread and a long term supporter of CUBE. I
would like to give my comments on CUBE's earning's report...VERY DISGUSTING
that a formerly great company would lead investors on with sketchy accounting
practices and outright lies.
CUBE says they sold 2.6 million VCD. But to whom? THE DISTRIBUTORS, NOT
THE END CUSTOMER. If you knew the CUBE's selling structure, Andy Chen, you
would have figured this out. This means that CUBE flooded their OWN channels with
CUBE chips, essentially shoving them down the throats of the distributors.
Let's say the market is indeed 14 million this year, as Alex says. Also, the general
consensus was about 2.7 million total VCD this quarter, let's just be nice and say 3
million was the total VCD chip sold to END CUSTOMERS.
Then if ESS sold 1.7 million, which is a pretty much accepted number, and will
probably be evident at earning's time -- only a few days away -- then ONLY 1.2
million of CUBE's chips were actually sold to end users (AND THAT'S A LIBERAL
NUMBER, GUYS). You see, CUBE WOULDN'T ANSWER how many chips were
ACTUALLY SOLD to the CUSTOMER, so we have to GUESS.
CUBE has at least 1.4 million chips to which they have flooded the market through
their own channels. What's going to happen? These chips are going to be RETURNED
AS UNSOLD, OR they'll have to literally give them away.
If you do the math, then you'll see that CUBE essentially gave the distributors so many
chips to sell, that one of two things can happen.
1) Their is no room for CL680 next quarter b/c of the current overflow of last
generation's chip.
2) To make room for CL680, chips sold this quarter have to be returned.
I suspect #2 because CUBE is banking on CL680.
But then look what happens to future earnings. You see, CUBE mortgaged their future
quarters just to make this quarter.
Unless they have a HUGE "Allowance for Uncollectible Accounts" in their quarterly
report, their will be alot of bad debt expense in future quarters due to returned
merchandise.
Maybe their accountants can pull some miracle off, but if indeed, ESST reports a
strong VCD quarter with good prospects, people will wise up to what C-Cube has
done.
Disappointing, to say the least.
I have sold my CUBE at Friday's closing price.
You guys shouldn't have pre-partied like that, because it will come back to haunt you.
Goodbye. |
