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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Robert Jacobs who wrote (35885)	12/2/2000 2:59:17 PM
From: slacker711	Read Replies (2) of 54805

I am still trying to make up my mind on the issues that Greenberg raised....however, I must disagree with the following line. The C3 stuff is no longer an issue since they are not banking on any revenue from them. I think the CTHR issue is at the heart of the reservations I currently have about Cree. No, I dont believe that moissanite will have any effect on the bottom line for Cree....however, one of the primary considerations in an investment (for me) is trust in management. I was never entirely comfortable with the fact that one of Cree's earliest customers was run by the CEO's brother. However, as long as each business was run in the best interests of the respective shareholders it was ok. Unfortunately, it appears that Cree stuffed the channel with moissanite. It is tough for me to come up with any other explanation for the nearly 4 years worth of inventory that CTHR currently has on hand. I am currently trying to go through CTHR SEC filings to see if I can find a rationale. I may be particuarly sensitive to this issue...my first investment was in US Robotics. I held the company through the 3COM merger, even though issues were continually being raised about the amount of inventory in the channel. I ignored these warnings. Inventory is a short-term issue....however the fact that management continued to ship product that it knew would not be sold created a fundamental concern about management's integrity for me. I would generally view the rest of the concerns that Greenberg raises as examples of financial engineering (except for World Theatre which again has a brother as CEO). I think I would normally ignore these issues except for the fact that when combined with CTHR, they seem to form a pattern of borderline financial practices. None of the above diminishes the prospect for future growth which Cree has. However, it may impact the size of my investment.... Slacker

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