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Technology Stocks : The New QLogic (ANCR)

QLGC 16.07

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Aug 24 5:00 PM EST

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To: doc who wrote (20147)	1/15/1999 12:57:00 AM
From: Kerry Lee	of 29386

I find that post VERY hard to believe based on what I've heard from several sources. Even IF it were true, I think to focus on ANCR P&L this early into FC story is to miss the whole point of Ancor being a FC story stock which is still classified as development stage company, ie, it will continue to experience lumpy/unpredictable revenues and quarterly cash burn of $3 million until the FC market ramps. I look at the Ancor story as a proprietary FC technology story ( evidenced by Inrange licensing/royalty deal) with few competitors in a potentially large FC market in the early stages of adoption. Few competitors in a high margin business with much more difficult barriers to entry ( Ancor is already on 4th/5th generation FC product )versus the typical Internet stock. Not to mention that Ancor is one of very few PURE Fibre Channel companies and one of the few PUBLICLY TRADED Fibre Channel companies. Not to mention that Industry consolidation is sure to take place as more of the Large Networkers commit to FC. 3 Com was the first to publicly endorse FC/SAN and it won't be the last. Short term, I do not expect any serious industry sales ramp until Y 2K, HOWEVER 1999 should be very exciting with many FC announcements and FC switch vendors selected. If the Gigabit Ethernet scenerio repeats itself in Fibre Channel, I would not be surprised to see the current "non-captive" companies become "CSCO/COMS/LU/CS/NTL - captive" by Y2K if not sooner. Keep your eyes peeled to FCA developments this year. PS - some of those who used to follow AMTX might recall the $400 million cash sale to TXN despite the slow adoption of ADSL, the DMT vs CAP debate ( even before ADSL-lite ), minimal revenues and the fact that by the time AMTX was sold, it had virtually zero cash left. We are still in a wildly frothy/speculative stock market, ie 1996 re-visited??

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