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Technology Stocks : Storage Dimensions - STDM

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To: kvogel who wrote (236)	9/24/1997 9:30:00 PM
From: nick cash	of 311

karl, after the live call i was pretty negative and after talking with management after the call i don't feel all that much better. bottom line is that management is rather befuddled by what is happening. this does not give me or any other investor a warm fuzzy feeling that things are going to turn around any time soon. it is much easier to analyze things like product delays, transitions and one time events and be able to determine when and/or if things will get better. this is not the case here so visibility for us as investors as well as management is very poor. projections for the next couple of quarters are reduced to guess-work. the new hires will raise sg and a expenses going forward with a big hit in q4 to pay the recruiter and pay the up front $ that is required to get even a half ways decent sales rep in the tech field. as near as i can figure and based on what i was told by management earlier this afternoon, break even revenues are probably in the $18.5-19.5mm for q4. whether they can attain this is anyones guess right now. i expect q4 to be at worst a loss of .02 to .04 and at best plus .04 or so. q1 is their toughest qtr of the year but one would hope that they can earn .12 to .15.-i have not reworked my model yet so this is just off the top of my head. karl, the problem is not so much too few sales people as it is that none of the existing sales force is making their quota's. under such circumstances i am leary about bringing in more rookies when 50% of the force are rookies now. if the current sales force can't sell what makes them think that more bodies (not replacements of current bodies) will solve the problem. seems that cpq and hwp have been very successful in selling customers on a one-stop solution. oh, i don't think it was solly and s.b. that had the heads up-volume was too low. it must have leaked out from the employees and the mkt makers got nervous just like i did. what to do? i centainly wouldn't put in a mkt order to sell on the open. hope it will hold the old lows for a double bottom formation. i don't expect any quick turn around here and visibility is too cloudy to do anything but guess about the outcome. the co. isn't going out of business though and if they do manage to get past this and start to grow with the market by q2 or q3 of next year (30-40%/year), an investment at 5 or whatever we see tomorrow would appreciate quite a bit. usually i have a good feel for whether management can do it or not. in this case, as you can clearly see, i do not. cetainly not a bet the farm situation. i have yet to decide what i will do. i do know i'm not going to sell at the bottom. all imo only....nick

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