Seagate Technology Message Board

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Technology Stocks : Seagate Technology

STX 275.77

+10.1%

Nov 5 4:00 PM EST

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From: Sam	4/4/2010 11:25:12 AM
	of 7841

Pretty good post from the Yahoo board on the divergent opinion on Seagate right now: I happen to agree with you but must say that the divergence of opinion is as stark as I've seen in a long time for STX in front of the March quarter release. One wonders if the seasonal hedge fund/trader crowd is still smarting from having been whipsawed last year by STX at this time even when it failed to post anything like good operational results simply because they were able to refinance out of a bankruptcy risk. Now of course STX is projecting its best March quarter ever and one that would be better than most of its December quarters on absolute terms and there is apparently high confidence that their inability to live up to that is a lay-up. Add to that the uncertain macro-economic environment and the every other day prediction that the disk drive is going the way of the dodo bird and they seem supremely confident that they can't lose (although not so much so that they didn't hedge their position with a raft of May 22 calls this week). On the other side you have true believers that see accelerating macroeconomic demand which includes recovering high margin enterprise demand that particularly favors STX, structurally constrained supply, Windows 7 refresh demand momentum, higher than expected pc growth rates, burgeoning non-compute demand for hdds and a lot more runway for hdds as compared to flash in the home, in the office and in the clouds. For me, the biggest source of comfort is that Luczo has an enormous amount at stake financially and reputationally and no near term exit path so he would absolutely not shoot high in guidance but would shoot to the high probability end of the bell curve. Given that, things would have to be far more demonstrably worse in the industry instead of where we seem to be with even the cautious analysts saying that they expect STX and WD to make their numbers and possibly better them but express concern about the trend relative to next fiscal year. The next three weeks will, if nothing else, be entertaining to see the games that big money bets play as the reckoning day draws closer. The sad thing is the intensity of emotion and vituperation surrounding the differences of opinion. It mirrors what is going on in the society at large and until we all realize that we have more in common and at shared stake that should unite us and suspend the personal diatribes, we will all be worse off.

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