<<how come no talk about a takeover? >>
It doesn't really make sense for anyone to takeover CUBE since the only way CUBE is going to make money is to become the leading MPEG chip provider to a wide variety of OEM's not a captive internal supplier. For example, if Sony took over CUBE, do you think Samsung, Compaq, Panasonic, IBM, Toshiba would really want to buy chips from one of their arch rivals? Hell no, they'd go to ESST or try to develop their own internal technology.
At this point, it would also be very hard to justify a takeover of CUBE right now since their technology leadership is in question, their management leadership is unproven, and the competition is fierce. Down the road, CUBE will be going head to head against the global behemoths (Toshiba, Samsung, Sony, Matsushita, SGS-Thompson, Phillips Electonic) in a technology that is strategically crucial to the electronic giant's futures. No one is going to give up and just let CUBE or anyone else dominate the market. I would be very surpised if more than one or two American companies is able to survive the upcoming years of competition. If one or two do, the market will be so huge, that those companies will do extremely well.
Accordingly, I view CUBE as more of a speculation at this point than a real investment. This is not a stock that should be one of your first purchases or one should consider a backbone of one's portfolio. This is as speculative as going to the races and "investing" in one of the ponies. I have only recently invested in this sector in a bottomfishing episode. Roughly 8% of my portfolio is invested in CUBE and ESST, the other leading company in the industry. Realistically, the most likely outcome is for me to lose some of my money or for these stocks to be "dead money" tied up in two losers that don't go anywhere. There is a chance, probably 40% or less, that one of these companies will do phenomonally well and multiply 10 or 20-fold. I am willing to take this speculative risk with my bubble gum money, but don't believe any one should be investing on the basis that CUBE is a "sure thing."
My advice is worth what you paid for it. I personally think anyone that makes their investment decisions based solely on what they read on SI is a fool asking to get taken.
Best Regards,
Grant |
