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Technology Stocks : Seagate Technology - Fundamentals
STX 284.93-0.1%12:47 PM EST
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To: Struggling Investor who wrote (1799)4/28/2000 3:48:00 AM
From: Gus  Read Replies (1) of 1989
 
Well, don't be a stranger and don't let this hellacious LBO scare you off the disk drive boards because if this goes through the legal gauntlet, you can just imagine the kind of other deals it sets up down the road.<g>

We have consolidation happening in the platter segment with HMTT and KMAG. The recording head segment is basically TDK/SAE by a mile so maybe this industry is starting to recover much faster. Quantum's DSS shows some really interesting numbers on the NAS side (Meridian) and if that holds true for all the other drive makers, that means at least 2-3x higher margins for everybody to blend with their lower-margined core businesses. Maxtor is expected to grab 20% of the very early stage NAS market, which is expected to be $1.2-2 billion this year depending on whose numbers you use. The interesting thing to watch as this industry moves along is how fast it can use the growth of the SAN/NAS market to shed the historical caps of its cyclical multiples. Key to that I think is how these revenue-rich but multiple-poor drive makers will take advantage and absorb the energy and innovation of the many storage networking startups drawn to the clear potential and rapid growth of this market segment.
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