SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Western Digital (WDC)
WDC 163.33+3.5%Nov 28 9:30 AM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Frodo Baxter who wrote (8041)12/5/1997 11:01:00 AM
From: Pierre-X  Read Replies (1) of 11057
 
Re: QNTM; Inventory bubble; D&A; Takeover

Thanks for the reply LK. Good to see somebody's actually looking at these things.

The inventory bubble you describe seems to have been a phenomenon at nearly every DD vendor. In the nature of a pseudo-commodity industry such as this, inventory bubbles at one vendor hurt everybody, particularly in the channel where switching costs are nil.

You were right about the D&A, I misread the 10Q!

I think any takeover prospects are nil for the following reasons:
1. I really don't think any DD vendors are looking to dramatically increase their capacity right about now; reference the failed efforts of Sing Tech to find a buyer for Micropolis.

2. WD has considerable franchise value in their brand name; a buyer would have to consider continuing production of drives under the WD brand. The inevitable product line conflict would not appeal to a suitor.

3. Consolidation through takeover generally occurs in growing industries, or industries characterized by a large disparity in strength between players. Right now I'd say everybody's too busy keeping their own sheep from dying to think about the neighbor's sheep.

PX

Postedit: I take it back, IBM may be a buyer.
Many factors in favor:
. they have the dough
. they do want to bust into the storage biz
. they have been a big buyer of WD products in the past
. they have no low end desktop drives, and
. they haven't been shy about big acquisitions in the past
hmmmmm
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News