The primary issue here is not whether VCD demand is slowing or whether there was some product transition problem. The primary issue is management's credibility. Every single one of the strong CUBE bulls on this board (myself included) felt relieved after CUBE's post-earnings conference call. Alex implied that their chips were flying out the door so fast they couldn't even keep up with it, and that this trend was continuing. Then he implied that the CL680 had become the chip of choice and that CUBE was taking back market share. I felt so good about management's reassurance that I picked up more shares. They were well aware at the time (just like ESST) of what was really occurring.
You should be able to count on management to cut through all the rumor and innuendo that arises regarding their company. CUBE has now demonstrated that you can't believe what they say. Any one who is saying to themselves things like, "Oh this isn't so bad", or "Yeah, but what about their encoder business and DVD?" is just fooling themselves. CUBE says lots of things and releases a lot of press. Where are the earnings? We've all made a mistake, we've all been duped. At the very least, money in CUBE is dead money and, more likely, the stock is going down from here.
If CUBE is such an innovative, exceptional company, then their stock should go up ten or twenty times from here. Might be better to wait until earnings are posting 100% or 150% year-over-year increases before speculating anymore on this company. Or here's another easy money-making tip. Sell all your CUBE today and rack up a nice capital loss. Buy as much stock as you can with your proceeds in a real company like Cisco. Review your decision in one, or two, or six months and see whether it was a good one. I'm confident that you'll find it was.
Sign me...
Long and pissed. |
