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Technology Stocks : Wind River going up, up, up!
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To: CFA who wrote (9641)5/17/2001 11:16:36 PM
From: Don Lloyd   of 10309
 
e -

...My question is this: How could someone as knowledgeable about WIND be so wrong? And if someone this knowledgeable can be so wrong, then why should I have any confidence in the company at this point? ...

The issue is that virtually all of WIND's current predicament is neither of its own making nor subject to its own control.

If you survey the companies in a wide swath of technology sectors, especially including telecommunications, networking, semiconductor manufacturing, and semiconductor equipment, you will quickly find that virtually without exception, they share WIND's fate, often to a larger degree.

No company can remain unaffected by a plague that infects both its customers' customers and then its customers themselves in turn.

If you look at CSCO's customers, for example, they found themselves in a business that had become a competitive death spiral. Each competitor had the choice to either go out of business immediately or make absolutely necessary investments that could in no way be supported by available revenues. If failure is not an acceptable option, the only thing to do is borrow all the money you can and buy the needed equipment. This is why CSCO sold (and sometimes got paid for) billions of dollars worth of equipment that never got close to being installed and now sits and kills the market value of any possible new CSCO production.

Regards, Don
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