While I share your obvious disappointment over both the shortfall at DSS and MB's lack of clarity at the HDD CC on the backback, I don't have quite as harsh a view of MB as you obviously do. He is in a difficult situation right now. HDD is in a sector which has overcapacity and some companies on a string which are pretty desperate to gain or maintain market share to stay in the game longer term. The requirement to maintain a strong balance sheet in such a situation is absolute. There are different criteria for a company to buy back shares than there are for individual investors or institutions. At some point HDD will at least double or, more probably, even better from these levels, if they continue to execute their business as well as they have been during these difficult times. When that point comes is more problematic, as it depends in the end on sector consolidation in some way or another, and better overall management of resources. As long as HDD can maintain positive cash flow, a buyback at these levels is surely warranted. When or whether Fujitsu finally announces that they will exit the desktop arena for the more profitable pastures of 2.5 inch drives and the portable market, whether WDC will grow their fledgling NAS business enough to gracefully exit the desktop business, whether SEG might abandon their stated position that they will use their considerable assets only to buy another company for technology and not for share or for consolidation--these are factors which can't be foreseen by the likes of us threadsters, but can only be hoped for, by shareholders and desktop participants alike.
As far as the DSS fiasco is concerned, I'm guessing that their now-departed President, Mr. PvC, bears more responsibility than MB, as well as the intrinsic difficulty of bringing SDLT on line. Those difficulties, though, are what allows good margins on their products. It's a challenging job, and I hope he and their engineering staff is up to it. If they are, they and shareholders will be well rewarded in the ripeness of time. |
