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Technology Stocks : Harmonic Lightwaves (HLIT)
HLIT 9.650-0.3%10:21 AM EST
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To: drsvelte who wrote (3843)10/4/2000 6:41:52 PM
From: Rob S.  Read Replies (3) of 4134
 
I listened to the conference call a few minutes ago. HLIT management is out of touch with their customers and internal operations. They said that slowness and increased losses may extend into the 4th quarter. They didn't think that there is slowness in customers plans to adapt to broadband systems but said that they are slow on implementation. The CEO would not answer a questions about why the recent acquisition was apparently too costly and not able to generate the level of sales and profits expected. Some analyst thinking is that they have lost business that they thought they would get with the acquisitions.

This does not look good. Either HLIT is losing business or the industry is in a downturn. They say the industry is not in a downturn. Margins are eroding. Sales are eroding. Costs are going up - particularly they have to pay more for labor and still can't hire or retain the people they need. I expect HLIT to drop by at least 50% from the closing price or around 11-12 this week and see no significant recovery for months. Management just hasn't got a clue as to when business may turn around or if, in fact, they will incur even steeper losses next quarter. This is an extremely weak hand.

I sold at around 16 in the after-market and have a big loss. HLIT management either is inept and can't understand what is going on or they are drastically losing business. Neither is good for investors.
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