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Technology Stocks : Disk Drive Sector Discussion Forum
WDC 221.51-0.3%Jan 16 9:30 AM EST
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To: Zeev Hed who wrote (8619)8/26/2000 8:29:05 PM
From: Tom Simpson  Read Replies (1) of 9256
 
<<but, I am still concerned with the debt load, potential dilution as well as the fact that they probably need something close to $200 MM quarterly to turn a profit. Are these numbers feasible with the slew of qualification announcements this week (and do you have a better estimate of a breakeven point)?>>

Right concerns, right questions.....they successfully traded one big chunk of questionable debt for less new convertible debt which is now well into the money. In addition, RDRT can elect to pay interest in stock....more dilution.

Its not just a question of getting to the necessary revenue level.....its also a question of where the cash comes from to finance the increases in working capital. Perhaps we will see a secondary stock offering here soon :o)

<<the fact that other DD's have also participated in this advance indicates a secular change in the sector's fortunes?>>

You must be looking at different data than I....certainly not quantum or seg or hmtt/kmag mxtr, invx and wdc could be argued, and we are left with the mystery of htch which doesn't even have any pr to explain it.
(Mind you I would love to see these dogs turn, I just cannot yet find substance indicating it.)

I shouldn't mind the tabled 3/8's....its just the cost of discipline. :o)

Nice trading........Tom
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