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Technology Stocks : Adaptec (ADPT)
ADPT 14.95+1.5%Dec 8 3:59 PM EST
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To: David Mullins who wrote (689)12/3/1997 11:51:00 PM
From: Bob Huff   of 5944
 
Wow, I return from a nice vacation to find my core holding
plummeting. The question to be asked: Is there anything
fundamentally different about the company that would justify
a loss of over a billion dollars in market cap in less than
48 hours? The answer is a resounding NO.

I find Soundview's action to be puzzling. Scott Randall's
original estimates were at the high end of the spectrum.
His new estimates are more inline with the rest of the street.
First Call has estimates at $0.57 for the quarter and $2.20
for the fiscal year. How does a minute trim in estimates
justify this kind of price drop?

So how much potential revenue does decreased demand in
this controller chip represent? I don't know -- call IR
if you really care. I can assure you any business with
Micropolis is bound to be minor. Western Digital's problems
are not related to demand. Adaptec is a well diversified
company and even Soundview recognizes this -- their earnings
cut is insignificant.

Seems to me this is a perception problem -- I heard CNBC saying
Adaptec makes components that "go into hard drives." Real
investors know there's much more to this company than that.
This isn't freaking Read-Rite or Applied Magnetics.

Technically we suffered some damage closing below both the
50 and 200 day moving average. One note of optimism: we
bounced off support in the $40 level. Many of you remember
the numerous attempts it took to break through that level
earlier this year. I would be concerned about any close below
that level. I will continue to hold and if I had any free cash
(which I don't -- Vegas vacations seem to affect that), I
would be buying.

My two cents,

Bob
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