Seagate Technology - Fundamentals Message Board

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Technology Stocks : Seagate Technology - Fundamentals

STX 270.96

-2.1%

2:28 PM EST

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To: Robert Douglas who wrote (972)	7/7/1999 2:27:00 PM
From: Kevin Linder	Read Replies (3) of 1989

Well, Robert I am in the same boat as you and the last two years has to make an individual wonder whether the disk drive industry might not be priced right at near worthless multiples. If senior level management at all of these companies cannot or will not see that these price wars do them no good then there will never be a higher valuation put on them - at least until there are many less players than there are today. The advances in technology by the drive companies is stunning - but what advantage has it lead to - "profitless prosperity" to coin a phrase from an investment analyst (not talking about the drive industry.) SEG and QNTM are holding huge stock buybacks this year - for what reason? The stock price is falling faster than the drive prices! I do like what Luzco has done with the VRTS deal, however it seems to me that what management should be doing is to consider diversification. They have a tremendous amount of cash and a large (especially considering the VRTS stock holding) stock investment portfolio that they can leverage. I think a purchase outside the drive industry would allow them to reestablish some credibility with Wall Street. The only other thing that I think that will allow these stocks to rise would be the demise of an industry player. I am watching WDC and MXTR may be vulnerable. Who knows, if the bloodbath continues then IBM may even want to get out of it. Until then, I think there is going to be more pain to come... Kevin Linder

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