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Technology Stocks : Creative Labs (CREAF)
CREAF 0.470+4.9%Jan 12 9:43 AM EST
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To: grogger who wrote (4101)10/9/1997 12:27:00 AM
From: Hitch   of 13925
 
Robb
My understanding of the revenue decline for Creative is that they have lower volume and average selling prices of CD-ROM drive-based products. Couple this with the ever increasing pressure in the Audio field and the revenue decline is very understandable. Management has been aware of this for some time and that is why they have been trying to diversify into other areas such as the recent proposed buy-out of Cambridge. In addition I am sure you have been following the introduction of new products recently-- note that the most recent ones have not been audio card related-- this is the attempt to broaden the product line and decrease the reliance on audio. DVD and Creative have been mentioned frequently-- the DVD product that they have is a good one but I don't think it will have a positive effect either on revenues or the bottomline in the next few quarters if ever. There is just too much uncertainty in the market place at this time for the product (few DVD titles, retail customer reluctance to purchase the product due to compatibility concerns, etc). Lets hope that management continues to diversify by using the $400 mil+ that they have in cash and that the purchases they make are accretive. I have been holding and adding to my position since the $7 range, it has been a bumpy but profitable ride and I am confident that management is in tune with the marketplace so the ride should continue for the forseeable future.
Best Wishes
Hitch
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