Hi Young...
Given today's action (which suprised me, but hey, I know the
shorts are scared) I would tend to agree with you. It looks to
me like the earnings and revenue decrease is already factored into
the price of the stock.
The only thing keeping me from jumping back in right now (besides
the fact that my cash is tied up other places) is that very low
revenue projection. What does this mean for the future? I
would have expected that by now Jaz and Zip would have taken over
the world. I'm trying to think ahead here.. What is after Zip and
Jaz? Can anything be as big of a hit? What will it take for revenues
to get back in gear again?
Technically, the stock is too deep in the hole (and too much
uncertainty pervades) to move too far upward. The only thing
keeping the stock up is the shorts.. There will be one more
short squeeze, then the party will really be over.. The shorts
will go find more fertile ground, and the longs will be selling
into the rally trying to make up for lost money.
My predictions (opinions):
The real future is DVD. (I can see it coming big time). You guys don't
realize it, but the floppy has already been replaced by CD-ROM and networking.
SW distribution is happening on CD-ROM (it will NEVER happen on ZIP
disks). And what do I do when I want a file from somebody? I FTP it!
(or get it over email.) for instance.. when Patrick was offering his
excel spreadsheet to people on this board, how many zip disks did
he send to people?? I think you know the answer to that...
Zip disks are too expensive to give away.
DVD is the next generation CD ROM, and will be re-writable in 2 years. (They are
holding back on recording.. like they always do on new medium.. ahhh
this is another topic of conversation. ) Zip and Jaz will just be souped up
tape drives (IMO).
PC margins are just too damn tight to be bundling ZIP drives as
standard equipment. Manufactures will kill for pennies (yes, they
will) of reduced factory cost. Until Zip drives cost LESS than floppy drives,
there is no way you are going to see these things standard on mainstream
systems. They will stay mainly aftermarket items. (Hey, why bundle
it when the customer will buy it themselves anyway???)
I just see a lot of clouds forming, and this severe downgrade is just
the first sign.. But hey, this is just one man's opinion...
kp
P.S. even after I said all that, I would still not short this stock.
why? rule #1 in shorting:
NEVER SHORT A LOW PRICED / DEPRESSED STOCK (below $20/share)..
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