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Technology Stocks : John, Mike & Tom's Wild World of Stocks
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To: John Pitera who wrote (2631)12/17/2001 3:39:42 PM
From: Logain Ablar  Read Replies (1) of 2850
 
John:

The main reason why I like ZOOX is they do have a good product (at least its been approved as working with other companies like LSI, QLGC) and its CHEAP (I guess 2 reasons).

Now we all know its CHEAP for a reason. They have a poor balance sheet (poor in the sense they don't have the cash to cushion them in a downturn) and they have not been able to sell to major OEM's (like IBM, EMC in this space). I estimate cash to FEB (can be off a little here, with luck March)

They did land a deal with CPQ in the summer and CPQ is finally shipping its product which incorporates the ZOOX switch. In the scheme of things the $$'s won't be meaningful but to ZOOX they are substantial.

Right not @ this time ZOOX's main problem is it obtained equity financing back in Sept (@ around $1.5) which was to carry it till it started generating more sales. Well the sales have been pushed back (not just zoox but brcd and mcdta also forecast flat to 5% sales growth this qtr with a pickup in 1st qtr).

No doubt the company has bet the farm on the next generation fiberchannel switch. It sorta reminds me of LTXX when LTXX bet the farm on their fushion prodcut a couple of years ago. That company also almost went bankrupt. The liabilities on LTXX don't seem out of wack so I don't think Ch 11 is in the cards. If they can't sell maybe they sell out to someone else. (speculation on my part is JNIC and EMLX need to expand product line to switches and they have the balance sheets to fund R&D)

MCDTA and QLGC so far seem to have a leg up (qlgc thry ancr acquistion). MCDTA is the solid one which should lead IF the economy recovers. BRCD seems to be behind in the rollout. MCDTA has had some nice announments indicating they are making inroads against BRCD.

I figure @ worst they are forced to obtain debt financing & I dump on a pump up of the stock.

Tim
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