James -
My brother (he's also an SGI holder) and I spent a lot of time talking about this last weekend. We both agreed that there will probably be a drop back to around 15, and then a hop to the LOW 20's, while people (esp. funds) decide whether they still believe SGI has the ability to deliver. I'm taking this opportunity to buy down my average now, because I think that as the quarter ends, there will be another jump to the high 20s to low 30s, depending on the numbers. Personally I plan to sell around 22, not because I don't think they can deliver, but because I don't trust the street. I hope that the jump to the low 20s will occur with enough time left for me to buy another couple of blocks before the quarter ends. If not, I won't sell, because I think that once (as Jeff said) SGI delivers a couple of barnburner quarters, we won't likely see these fire-sale prices again.
The only thing that concerns me is that McCracken keeps on talking about NT. That would be a seriously bad move, IMHO, and I believe it would cast doubt on SGI leadership. SGI has never been a commodity product, and it shouldn't be. Margins are too low, and to embrace such a product would tarnish SGI's image. It would be like Ferrari announcing that they are going to put Hyundai (no disparagement intended) engines in their cars. Sure, they cost less, and get you where you are going (eventually), but in the long run, the consumer's going to suffer. SGI consumers know what they are buying, and they know why they are paying as much as they are. I've heard a number of rumors about magazines that publish benchmarking numbers having to run NT machines a couple of times, because they keep on crashing under the loads that performance benchmarks introduce. Maybe that's why neither DEC or INTC run their benchmarks using NT.
That's my $.02, I hope you find it useful.
-justinb |
