Although I believe there is reason to retain a healthy skepticism on NT, I believe most of what you have stated is priced into the stock today. Yes, the company has lose HUGE amounts of money in writeoffs involving inventory, RIFs, and goodwill. Yes, they have fallen dramatically from their peak of $8b+ rev/quarter. Yes, they are a posterchild of the internet bubble.
But, NT *COULD* survive and thrive in a post-bubble environment. They appear to have finally reached a break-even rev/cost structure, where they can build to profitability as early as Q2 02. It appears that most, if not all, the writeoffs are over. The key, as Kenneth aptly pointed out, is Q1 02. If they can reach a break even rev level in Q1 (assuming some writeoffs remain, resulting in a break even pro-forma and small overall loss), they could be poised well for the inevitable recovery.
Hopefully, one thing that Dunn has learned from this is that profits DO matter, and cash IS good. Slower, but well managed growth with continued profitability is back in vogue. Investors should remain cautious, as Dunn has not yet proven that he understands.
Happy Holidays to all! |
