Hi, Doren:
Not sure if anyone answered your question, so I'll give it a shot, in English (not TechSpeak). Caveat: there are other people on this thread who have studied the company for far longer than I have, and know the industry better, and could probably give a better answer.
A gorilla is a company that can permanently dominate a rapidly growing industry, and is able to rapidly grow sales while maintaining high margins, because it owns something that no one else can duplicate. The things it owns can be: crucial patents (QCOM), an industry standard (MSFT), employee skills (Cymer), installed base, and relationships with customers (permanent and difficult to transfer; SAP).
I'm not sure if SNDK is a gorilla. I have this sneaking suspicion, that a lot of the companies on the Gorilla List, are going to end up like Micron, or Seagate, or IBM's PC business. That is, the industry (and company) units sold will grow spectacularly. Everyone will need their products, more and more uses for them will be found. Sales will grow not as fast as units sold, because prices will fall steadily. Profits will grow much slower, as the industry matures into a commodity business. Expected stock prices (based on accurate forecasts of units sold in the future, but wildly over-optimistic forecasts of profit margins) will not happen, and investors who bought based on those forecasts will get seriously hurt.
Anyone who wants to invest in gorillas, should study the failures as much as they study the (expected or proven) successes. I would encourage you to study, in detail, the history of Xerox and RCA. That road could easily be travelled by SNDK or EMC.
Again, there are others who would give you a much more informed, and different, answer. |
