Thanks for the response. To set the record straight, the conversation is about a briefings report this afternoon:
13:07 ET Western Digital: Hoefer & Arnett is hearing reports of yield problems (WDC) 14.40 -0.08: Hoefer & Arnett saying it has received several reports from industry sources that WDC is encountering some of the same problems that Maxtor and Seagate experienced on their 80 GB ramp. One source quotes WDC's 80 GB yields at 60%-70%, versus >85% yields reported elsewhere.
Sarmad's response was: "I guess now they try to drop it by putting out press releases to amplify rumors."
To which I replied: "This doesn't sound like a rumor to me. H&A is citing multiple "industry sources". Yet you dismiss it out of hand as a fabrication by shorts. Is there any particular reason why you believe it's a fake?"
Now in surreply to your reply:
If he had any knowledge he would say: "Yields have fallen from 85% to 70% in the past month".
Not necessarily. The only definitive source of information on yields is WDC and WDC has no obligation to disclose such information at this time. Besides, in the interest of timeliness, it is perfectly legitimate to report something that is corroborated by "multiple industry sources", even if it cannot yet be confirmed by the company. In fact, it now places the onus upon WDC to refute the "rumor" if in fact it is unsubstantiated.
What yields is he talking about ? There are at least 6 stages where yields are measured. With a time frame of approx 10 weeks for a complete run-through from wafer start to shipping a drive. If this guy had any knowledge, he would say what stage.
I think he does have knowledge due to his ReadRite experience, but he apparently did not feel the need to be more specific. Let's see who "he" is:
"MARK S. MILLER who was recently rated a 5-Star Analyst by Zacks, joined the Firm as a research analyst in 2000 after working as a research manager at Read-Rite Corporation, where he headed a process development team. Mr. Miller has 25 years of management and technical research experience with organizations including 3M, Seagate Technology, NASA, and HMT Technology. While at NASA he was a Space Shuttle Astronaut Semifinalist. Mr. Miller has authored forty publications in nine major science and technology journals and holds three patents. Mr. Miller received a BA in Physics from John Hopkins University. He also has a MS in Physics and was a Ph.D. candidate in the Physics Department at the University of Maryland. In 1990, he received an MBA in finance and marketing from the Carlson School of Management at the University of Minnesota. Mr. Miller covers the hardware technology sector including data storage, optical technology, and thin film processing equipment firms."
hoeferarnett.com
Mark is apparently not without HDD industry experience or contacts, though he may be somewhat stretched as H&A's only tech analyst. His 5-Star Zacks rating carries some weight, though I don't know how Institutional Investor and others rate him.
mark.m@hoeferarnett.com
1-415-362-7111
On Sept 9, 2003 Miller gave a presentation at DISKCON USA 2003 on "The Impact of Key Technology Transitions on the Data Storage Industry" idema.org
In an article last year on ReadRite he was quoted as saying:
"This is a very difficult industry, and heads are the most difficult component," said Mark Miller, a former Read-Rite engineer who now works as an analyst with San Francisco-based Hoefer & Arnett. "In some ways, they're more complicated than pentium chips. That's driven a lot of companies out of the business." bizjournals.com
It sounds to me like his skepticism may come from his ReadRite experience which may have soured him on the head industry in general. I have no reason to question his integrity though.
This guy is the same bozo who down-graded wdc immediately after their July CC because of "uncertainty". Was this uncertainty burning at him so much that when the stock price recovered, he had to shake loose some more shares to help shorts cover ?
Indeed, it was MM who issued the downgrade from buy to hold on July 25.
OPEN HI LOW CLS VOL adj cls
7-Aug-03 9.05 9.05 8.60 8.64 4,464,700 8.64
6-Aug-03 9.25 9.29 8.86 9.08 4,633,400 9.08
5-Aug-03 9.76 9.76 9.16 9.20 3,441,700 9.20
4-Aug-03 9.77 9.83 9.35 9.45 4,490,300 9.45
1-Aug-03 9.93 10.13 9.73 9.76 2,749,300 9.76
31-Jul-03 9.74 10.09 9.68 9.96 5,369,500 9.96
30-Jul-03 9.69 10.69 9.25 9.70 5,510,800 9.70
29-Jul-03 9.67 9.74 9.50 9.52 6,458,500 9.52
28-Jul-03 9.97 10.09 9.57 9.73 6,313,700 9.73
25-Jul-03 11.00 11.00 9.50 9.94 17,471,600 9.94
24-Jul-03 12.17 12.29 11.52 11.70 5,499,900 11.70
And it certainly did shake out some weak hands.
I suppose we shall see ...
Sam |
