Silicon Graphics, Inc. (SGI) Message Board

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Technology Stocks : Silicon Graphics, Inc. (SGI)

SGI 91.87

+1.8%

Dec 5 9:30 AM EST

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To: Thomas A Watson who wrote (5982)	4/1/1999 1:19:00 AM
From: Jim Davison	of 14451

I don't think major analysts are supprised or particularly worried by the earnings shortfall. The last conference call we were warned that there would be large expenses involved with ramping up production of the new VW line. The rather late delivery of the product indicates they probably encountered significant difficulties -- maybe associated with large product demand. The real issue is how well the product will do once production has ramped up to meet demand. If the signals are good, then the stock will ignore earnings warnings. It was certainly interesting to see today's spike so close to the negative announcement. Maybe SGI deliberately bought some large blocks? A case of sell-on-the-rumor-buy-on-the-news? I also suspect recent upgrades are based on some factual evidence of product demand. The show is not over yet, folks. --JD

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