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Technology Stocks : QUANTUM
QNTM 9.380-4.7%Dec 12 9:30 AM EST
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To: Z Analyzer who wrote (5763)11/28/1997 12:33:00 AM
From: Rob S.  Read Replies (2) of 9124
 
I don't think Quantum should spin off DLT or high-end DDs or any other segment at this time. In fact, they are in a strategic position to move forward to achieve superior long-term growth. One of the problems with companies in the DD business, and the basic reason why they typically do not attract "normal" P/Es compared to other high-tech growth companies, is that they have been primarily dependent on single product categories - when the DD business gets into a temporary oversupply or shift in technology cycle, similar to the one we are in now, profits nosedive. The DLT looks great for the next couple of years or more but who will bet that it will not be superceded within three or four years by some other technology, maybe NFH and/or another tape format?

Quantum needs to be diversified acrosss a few different basic storage product areas and perhaps also try to move "upstream" toward more systems level products.

I tend to keep my investment focus short-term but would argue that Quantum management should have a longer-term focus. I don't understand their business nearly as well as they do, but that's the way it seems to me. The needs for storage devices of many types will continue to grow at a very healthy pace and Quantum is in a position to move further ahead of everyone else in the business by leveraging their strengths and keeping one step ahead in all areas. Longer term thinking will bring the greatest value to Quantum shareholders.
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