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Microcap & Penny Stocks : OPTI
OPTI 0.00160+23.1%Jan 9 9:30 AM EST
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To: John T. Hardee who wrote (306)6/23/1997 3:30:00 PM
From: slob   of 482
 
All, seems to confirm my doubts that OPTI could prosper where ESST was failing. PC Audio's biggest problem is that it seems to be regarded as a tick list item, on Multimedia PC's (whatever they are). It is real hard to demand profit margins above 25% on non-differenciated components. So unless things change this whole area looks like a sink hole for all companies involved. Hopefully it will go the way of the RAMDAC and the companies that stick to it will all come out the otherside of this with less competition and a significant technology/design entry barrier. But for the moment it looks ugly.

As for reducing overheads, the only way that this will please me is if OPTI can show that by concentrating on one area they can improve margins. I cant see this, so I hope that they dont sacrafice their future just to make the short term look good. Lets face it this is a two product company, It makes portable PC chip sets and Audio controllers. Intel will no doubt turn up the heat on the PC chip sets that leaves only Audio. It would be silly to move away from the mobile chip set market while there is still money on the table so that leaves OPTI in both camps for the time being.

I only wish I had more faith in Jerry's ability to pick high profit markets, instead Jerry seems to be able to spot a market just before it craters. Jerry lets here a little more about Tripath, Opti could sure use some good press for a change.

SLOB
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