ACTM $100 Million Cable Modem Contract with MOT Message Board

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Technology Stocks : ACTM $100 Million Cable Modem Contract with MOT

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To: jeffbas who wrote (312)	11/6/1997 10:35:00 AM
From: kolo55	Read Replies (2) of 1250

There is a correlation between OEM price cut and ECM margin. But its small. More important is unit growth. More units means more lines, and ECMs expect to get a certain amount of gross income per line. If the price cuts prompt unit growth, then the ECMs get more gross income overall, because there are more lines running full. Right now ACTM must have spare capacity, so lets hope unit volumes grow. BTW I heard this morning on CNBC that 3COM was experiencing some buildup in their inventory channels, according to a conference call between Eric Benahamou (3COM CEO) and analysts. This shouldn't be good news for the companies that just took ACTM's 3COM business. I still think the stock should rally to the 19-20 range. I've filled my portfolio to the level I want now. But if we get tax loss selling in December, and the stock remains at 15-16 then, I'll look the situation over, and load up the boat. The rally in the other ECM stocks will eventually spill over to ACTM, and this stock has a history of spike moves, when it does move. Paul

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