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Technology Stocks : Wolf speed

WOLF 18.56

-6.5%

Dec 12 9:30 AM EST

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To: Tom Pulley who wrote (2971)	7/27/2000 1:11:03 PM
From: Tom Pulley	Read Replies (1) of 10714

I'm talking to myself today: "Tom, remember when you bought this stock you were buying it for the long term. When you told others about it, you made sure they understood that it would be extremely volatile and they should not buy it if they could not withstand huge swings in stock price based on the slightest short term bad news or even no known news at all. Last quarter Cree's earnings grew sequentially from $0.18 to $0.26. It sounded like the ramp in LED volumes was accelerating during the quarter.... so earnings could increase another 8 cents or even more this quarter (my guess is $0.35 excluding extraordinary items). The news since the conference call has been good news regarding further LED product development and RF microwave device progress. So, what could be affecting the stock? 1) Institutions are now easing back on their technology holdings (particularly semi's)and increasing holdings in other sectors as the economy enters a period that will be favorable for other sectors. In other words, now that interest rates are stabilizing, there is more than one place to put money. Since Cree probably gets lumped into the semi's for institutions, they get hit. 2) Perhaps it is becoming apparent that it will take a little longer than expected to get the RF devices designed into new products/systems and actually being used on a large scale. (I have no information on this, but it seems new products can take a long time from the discovery stage to implementation). 3)Most individual investors who know the story on this stock and are long term buy and holders have already bought about as much as their risk profile will allow. So most of the people buying the stock now are traders.....and the traders are dumping based on stock price movements, not fundamentals. The dropping stock price causes weak long term buy and holders to get nervous and sell some also. So, we have lots of sellers and no buyers. All this leads to the conclusion this will be another opportunity to buy that will look like a no brainer in three years when the stock is at $500+." OK, I'm convinced. Now I'll turn off the computer and go run some errands. I'll check back in later and see if they blew away estimates as expected. Tom

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