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Technology Stocks : Seagate Technology - Fundamentals
STX 321.51+5.8%3:59 PM EST
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To: Stitch who wrote (1106)8/26/1999 1:18:00 PM
From: Z Analyzer  Read Replies (1) of 1989
 
Stitch,
It is interesting that you expect Seagate to reduce its workforce in China due to logistical undesirability at the same time that Conner is commencing operations there. Having recently spoken with someone who is quite familiar with Conner, it seemed to me that Seagate's greatest motivation for the current pricing pressures might well be to keep Conner from being able to get the funding needed to get off the ground. Conner is looking at adding about 12 million units of capacity, which would be enough to keep this industry in the doldrums for quite some time. I even hear that Seagate is applying pressure to suppliers to not do business with Conner which would tell me they are quite concerned. I wonder whether Conner, as a nine U.S. company, is in anyway protected by the antitrust and anticompetitive laws of the United States.
I also have to wonder how Conner, with 4 GB per platter drives will be able to compete with the one side of one platter drives being brought out today. Further, I have to wonder how much of Conner's anticipated competitiveness with his virtual company is based upon being able to obtain component at today's prices which are unsustainable on a long-term basis since the suppliers will no longer exist if pricing doesn't improve.

Is your forecast of declining head counts enough to turn you negative on Hutchinson? Are you still an owner? -Z
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