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Non-Tech : Mackie Designs (MKIE)
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To: Chris Nevil who wrote (51)11/25/1997 9:24:00 PM
From: Stingray  Read Replies (1) of 61
 
This announcemnt sure took me by surprise, just when it seemed that they were getting their act together, with a new product shipping each quarter and revenues on the way up.

There are a few things which concern me - first the stock had already fallen from around 9 1/2 to 8 in the two weeks before the announcement was made. Clearly someone knew something that we did not, I don't know if it was insider trading or just someone smart enough to figure out that Mackie was going to lose sales overseas, maybe because Mackie lost a distributor to some other supplier. I would be very interested to know if any insiders sold stock just after the results were announced.

Second the anouncement came pretty early into the quarter, if they can tell this far in advance that they won't meet their revenue targets that is a bad sign.

Third the press release said there would not be much impact on next years revenue. If a competitor is dumping mixers that would seem to be a problem that would continue into next year, unless said competitor is indeed losing money on the dumped mixers and will cut back production next year to an amount they can sell.

On the positive side the new products are coming out, the company is committed to investing in R+D, they will have more new stuff to unveil at NAMM and the digital 8 buss product when it comes out could be the companys biggest money maker. The price to earnings is not particularly high. Both my local music stores seem to be selling plenty of compact mixers.

While I am not happy with the recent announcement I'm staying the course because Mackie is the one small cap in my portfolio and I see it as a long term investment.
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