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Technology Stocks : C-Cube
CUBE 37.53-0.2%Jan 30 9:30 AM EST
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To: Eric Thacker who wrote (955)6/13/1996 1:59:00 AM
From: Andy Chen   of 50808
 
a note on tax cut. to eric:

i follow to common mottos
"every penny saved is every penny earned"
"every tax paid is every money go down the tube"

basically, by acquiring divicom, cube can benefit from a lower tax
bracket. this provides the company with more value-added on top
of more cash flow. the fact that cube paid a higher tax rate in 1Q 1996
than 4Q 1995 means cube's income were expanding at a higher rate
than it looked on earning reports.

i have yet to hear steve landrum's comment on tax cute benefits. i
wondered what happened.

--eric, i would love to hear your estimate on the amount of oakt
controller push-out that was based on PC and the amount based on
videoCD. what is the percentage of oakt income?

a reminder. digital cable tv will be launched in july. all existing analog
set-top will gradually be replaced with digital capability. sat tv is already
online but massive deployment expected due to cube's cost-effective
encoding solution. cube has a monopoly here.

competition may play a big part in squeezing cube's mpeg revenue.
however, please take the following into consideration.

1) cube has DEEP development contracts with key electronic
manufacturers. this will ensure them with constant inflow of income
and constant revenue from mpeg chip sales

2) cube has taken away a lot of competition so far by introducing
products such as cl484 (taken out the need for a separate rom controller)
and mpeg PCCard (the first mpeg board for laptop).

3) cube also has a play in the expanding PC tv tuner and graphic
OVERLAY technology through the purchase of a small private
IC company last december.

4) cube broardcast encoder is the industry driving engine behind
the digital tv revolution.

speculators i recommend you sell into the flow. however, you will
always know people like me are picking it up at a lower price.
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