Well certainly getting to a conversion point on the bonds is what is fueling SOME of this huge volume, that combined with the short interest and the fact that the company is indeed due for a turnaround at this point...Don't see BK anywhere in the future either...
Here are some important points to consider also:
1) In the last 6 months, consolidation happened in the tape companies. There are only 3 suppliers worldwide, TDK, RDRT,
and ALPS.
2) RDRT's 20Gb head is the best in the industry.
3) RDRT is about to enter the fiberoptic business.
4) RDRT's balance sheet changed completely, with the debt restructuring since March and again in May.
5) 17.9M shorts on 56M shares.
6) The company operations was trimmed from 26000 to 11000 employees, with a couple of times increased productivity,
yield improvement, and management changes.
7) Price increase for magnetic heads is inevitable, as the areal densities increase.
Regarding KMAG and HMTT, the price pressure is continuing in the magnetic disk manufacturers, because there are seven
of them and that number has to go down to two or three. One in Japan, and one the U.S., as independent merchant supplers. There won't be recovery until 2001.
(from Yahoo board)
The real ace in the hole will be the fibreoptic card...No one is certain what that will be or when it will be played at the moment, but with this type of action in a weak market it certainly lends credence to the fact that it's in their current poker hand and could be played at any moment...
chris |
