QUANTUM Message Board - Msg: 3037972

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Technology Stocks : QUANTUM

QNTM 8.205

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12:41 PM EST

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To: Steven W. Liu who wrote (6869)	12/24/1997 12:10:00 PM
From: Rob S.	Read Replies (1) of 9124

My guess is that the government and financial community swon't let a large diversified company like Samsung or Hyundai go under but may force them to "rationalize" their business plans over time. They may force them to cut back severely on their expansion plans (Samsung and Hyundai have already announced aprox. 30% reductions in cap ex plans) and to trade off higher pricing against market share expansion. That is the only thing that will make sense in the longer term because the huge debts these companies have ammased are now becoming greatly more expensive - the IMF and international financial community will only lend money to roll-over the huge debts or provide more needed funds at much higher interest rates than these companies have been accustomed to. The lowering of the Korean and other countries debts to "junk bond" status will mean higher interest rates than their international competitors will be able to get and the debtor companies will be required to pay back the indebtedness rather than use funds for further agressive market expansion. Some of the secondary companies are likely to be allowed to go under or be bought up by foreign companies. If the Loreans are truely liveralizing their monetary and regulatory positions, they will make it easy for foreign companies to buy up facilities on the auction block and put them to use. That will keep people employed and will create a true competitive environment that will be the best solution to the problem. If the people of Korea are smart and industrious, which I believe they defintely are, they will do quite well in international competition on a more even playing field that is not manipulated to benefit the few over the many. These are my "armchair" observations and I would appreciate anyone's interpretation and comments.

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