<<That's right, one won't recover without the
other. In 20/20 hindsight those Long on CUBE should have interpreted the ESST
downfall in April as a major Alarm Bell. It was a clear clarion call for all.>>
Sorry, I have to disagree. THE REASON CUBE FELL WAS BECAUSE OF ESST.
Before I go on, I suggest that anybody who DID not listen to the call,
listen to it before they write to me.
Anyways, one of the reasons ESS fell was because it seemed that Fred
Chan's boisterous claims that he would take 80% of the VCD market by
year end were false after CUBE reported 2.6 million VCD chips sold.
Also, Fred insisted that he was the VCD leader and NOBODY believed him.
Another problem with ESS was perceived lack of a PCI audio product and
pricing pressures in current audio market.
So TWO PROBLEMS mixed in at the same time made people think it was over
for ESST.
Well, with today's VCD announcement, one hurdle has been cleared.
After Q2 is over, the other hurdle will be passed too. That's because
PCI audio stops sampling and then starts shipping. Q4/Q1 in volume.
PCI audio is a very high margin product and is the future of audio.
Also, AB's claims of market share stablization a mere 4 weeks ago,
at the shareholder's meeting led the street to believe that Fred was lying.
CL680 was supposedly CUBE's savior. Well, it looks like that the chip
doesn't work. Plus, the ESS3210 had already taken most of the Chinese
big VCD OEMS so CUBE's chances were small at best.
Let me ask you something? Can you say MONOPOLY for ESST in VCD?
The problem with CUBE is that 1/2 those chips were on accounts receivable.
This gave them an inflated net income to make last quarter.
Now they'll be seeing returns and other problems associated with channel
stuffing.
Why am I like this with CUBE? It's because the company has been engaged
in a soap opera of lies and denials and today was the tip of the iceberg.
With flat sales in DBS and DVD not picking up until NEXT year, CUBE
is a wildcard at best.
If you don't believe me, listen to the call, and read the posts from
the last 6 months.
ESS starts moving up after Q2 earnings are released and any "bad"
news associated with the current audio pricing is over.
It's all about PCI audio.
Let's not forget ESS's v.34 modem product shipping IN VOLUME at end of
Q2.
Things don't happen in a day, but let's just see where these two stocks
compare to each other in December.
Regards,
PrettyBoy |
