When pondering RDRT's decision to pursue the optics business, I'd guess they've made a strategic decision for their
future. They had to. Really no choice IMO. Magnetic heads surely have not been a "super" business for them...even
considering their technical leadership at certain times. They needed to do something, so in my mind the motivation was
clear - though only time will tell if the choice was a good one. With their current revenue, cash, debt, competition etc., can they succeed in optics? No clue, but I think its clear something needed to be done, so they made a decision. Also, they must have considered that, though the magnetic hard disk will be around for the foreseeable future, it is destined for replacement "some day." Who wants to be holding the "magnetic bag" when "some day" comes. It's all logical. Resolution (or lack thereof) of fiscal issues is the unknown.
Regarding the recent action, It is certainly conceivable that short covering has had a hand in it. More than a third of the float! Volume picked-up steadily after the bounce from 2. Shorts that have made money down to 2,3 or 4 may find the
risk-to-reward not worth it anymore - even if there is a chance RDRT craps out. Could go to 0 or could fly if all pans out. |
