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Technology Stocks : Ampex Corporation (AEXCA)

AMPX 13.15

+5.7%

3:59 PM EST

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To: Gus who wrote (705)	9/19/1997 2:55:00 PM
From: Stephen W. Leahy	of 17679

Hey Gus, How right you are regarding IBM: "Ampex Inc. (AMPX) said its Ampex Systems Corp. unit entered a multi-year Original Equipment Manufacturer agreement with International Business Machines Corp. ( IBM ). Ampex said in a press release that under terms of the agreement, the unit will provide its DST robotic tape libraries and helical scan tape drives to IBM." Unfortunately this comes from an AXC press release dated 11/17/93. Yes - 1993. 6 months later AXC and IBM unwound the agreement. This is the OEM that was referred to in some of AXC's financial reports. In 1995 DST sales were down due to the comparison with OEM sales to IBM in 1994. I think Bramson found that IBM didn't make much effort to sell DST and was discouraged with the deal. And of course margins on an OEM deal are MUCH lower than direct selling. A few years have passed since that time. Maybe IBM or someone else will show a renewed interest in an OEM. The demand for this type of product is probably much better recognized now than in 1993-94. This could be the type of random event that could really help us out. But I have no reason to think such a deal is even contemplated at AXC.

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