QUANTUM Message Board - Msg: 2944192

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Technology Stocks : QUANTUM

QNTM 9.940

-0.6%

Dec 5 9:30 AM EST

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To: james who wrote (6596)	12/11/1997 9:26:00 PM
From: Rational	Read Replies (2) of 9124

James: This is again another point of success for the smart young Harvard-Stanford trained CEO of QNTM.* He did not hedge much (if at all) for currency risk because it was the dumbest thing to do. A lot of SEG's losses were mainly from currency hedging. The DD makers are not selling much in Asia, they are buying (labor) there. SEG got into forward contracts (say) in June to buy ringgat in September for a currently (as of June) agreed-upon price of ringgat in US$. Ringgat lost about 30% between June and September and SEG got sucked in because of the promise to pay 30% more dollars than it would have paid without hedging. [I am not exact about SEG's contracts, but the picture is roughly what I am describing.] Companies like IBM, SUNW and DELL hedged and protected their earnings well because they sell in Asia. SEG hurt itself and most of the losses on SEG Q10 are still not realized!! QNTM did not hedge much (if at all) because it had a better understanding of the situation. The CEO is a highly talented business/finance guy, IMHO. SEG CEO is very talented in DD innovation (and there is little left to innovate now), but he depends on others on esoteric concepts like hedging!! Sankar quantum.com * Michael A. Brown Michael A. Brown, chief executive officer of Quantum Corporation, joined Quantum in 1984 and held various marketing positions until 1989, when he became director of product marketing. In 1990, Brown was promoted to vice president. He became executive vice president responsible for the company's hard drive business in 1992 and chief operating officer in 1993. Brown's contributions include developing the strategic business plan for the company's entry into the 3.5-inch product market. Before joining Quantum, he served two years as a research associate at Braxton Associates, a strategic planning consulting firm. Brown holds a B.A. in economics from Harvard University and an M.B.A. from Stanford University.

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