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Technology Stocks : Wind River going up, up, up!
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To: Allen Benn who wrote (9017)1/4/2001 12:03:47 AM
From: umbro  Read Replies (1) of 10309
 
Allen wrote: WIND is well-positioned to reap rewards from these developments, particularly the 50 basis points reduction in the federal funds rate. While it generally takes about six to nine months for changes in interest rates to impact the economy, the time it takes to impact WIND’s business this quarter is closer to five minutes. As everyone knows WIND closes Q4 at the end of January, not December. Further, design wins have a habit of stacking up for approval at the end of quarterly periods, with WIND’s seasonally biggest quarter doubtlessly not an exception. My guess is that prior to today any number of WIND’s customers felt deflating pressure about getting to market quickly because they didn’t know for sure if there would be a market. The Fed’s action signaled that there surely will be, and that the race is on again. This means that any potential for a slowdown in design wins in WIND’s Q4 due to concerns about the economy has just been reduced if not reversed entirely. Thanks Greenspan.

Got a question about how sales are accounted for: do they go into the quarter when they were booked, or when the payment is received? If the DSO (days of sales outstanding?) are about 80 days, then would that mean that revenues received reflect (on average) purchases made 2.5 months ago? If true, then it would seem that most of the "Greenspan gift" would be accounted for in the next quarter (i.e., first quarter, 2002)?
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