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Technology Stocks : Western Digital (WDC)

WDC 161.03

+3.5%

Dec 4 3:59 PM EST

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To: Sam who wrote (7584)	11/14/1997 3:50:00 PM
From: Pierre-X	Read Replies (2) of 11057

Re: Price Cutting and Layoffs Price Cutting: WDC is certainly matching the falling price levels in the industry. It doesn't take much effort to discover this for yourself, just talk to your favorite local computer dealer. Layoffs: I would ask Philip to provide evidence for his allegation that "Large scale layoffs are around the corner." William Haggerty, in response to a question at the shareholders meeting yesterday, indicated that there is a hiring freeze on non-production personnel. However the Micropolis shutdown provides an opportunity for them (and every other HDD co) to hire experienced people in what he called the tightest labor market in recent history. Sam said: >If you are long WDC or any other DD vendor, you should be hoping >that ASPs stabilize in the next 2 or 3 months, and that the price >cutting does not extend beyond 2.5-3 gig drives. Oh come on!!! What is this "you should be hoping" ?? If you are long a DD co, you should be BUSTING YOUR ASS to figure out what's going on in the pricing environment. * Seagate was the perpetrator of pricing instability in 1Q98. * Fujitsu is the perpetrator in the current quarter. The big question is, what is Fujitsu doing with respect to pricing? Will they continue to price aggressively in pursuit of market share? Will they expand the battle front to the higher capacity points? The next big question is, what is Samsung planning? They have publicly stated that they intend to achieve No. 3 drivemaker status in 2 years. That's a bold statement, as Vincent Vega would say. They have invested a BILLION DOLLARS so far in HDD efforts. I am continuing to bust my ass delving into these issues. I'm very surprised not to see others doing the same. Ciao, Pierre-X

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