QUANTUM Message Board - Msg: 2970345

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Technology Stocks : QUANTUM

QNTM 9.380

-4.7%

Dec 12 9:30 AM EST

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To: BroSnack who wrote (6761)	12/15/1997 3:26:00 PM
From: Rob S.	Read Replies (1) of 9124

On your item 2: The Asian suppliers have huge debts that they have used to rapidly expand production. The debt is largely valued in U.S. dolars or Japanese yen and the devaluation of the won means that these companies now must pay back more wan proportional to the devaluation. Pressure is now being put on the Asian economies to pay back their debts and become more responsible in how they give out new loans or roll-over existing ones. So as I see it, your example of lower cost of manufacture is only skin deep and will be more than off-set as the reality of the tight credit situation winds it's way through to individual companies. We may see some very agresive price cutting that will continue for the next 3-6 months. IMO this cost cutting should end as Asian companies start to pay back their debts and as US HDD mfgs. work out their overcapacity and inventory adjustments. I think it is still premature to call a bottom on Quantum, SEG and WDC. We may get more bad news as it appears that DD prices are continuing to slide down. However, buying now would probably be rewarded within six months with higher prices.

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