Y2K EXPENDITURE SHIFT - LONG POST
Also described as 'potential Y2K spending dislocation' (Peter_Niehaus@msn.com).
What effect will Y2K expenditures have on stocks that are not or only partially benefitting from Y2K? I have posed the question on several boards of SI; and I have seen distinct reactions (sometimes no reaction at all). Other people have also posed this question. I am still guessing on many stocks. Here you have an overview of what I have found and posted.
Hope it is of some interest! Anybody cares to add / make remarks etc?
John
-----
To: Roger A. Babb (4691 )
From: John Mansfield
Y2K-CTXS - what happens with CTXS in the face of shifting IT budgets?
exchange2000.com
Found on the auspex thread; thanks to James C. Johnson!
This is also an issue for the CTXS stock. The following argumentation applies:
- hour rates for IT personnel is and will be going sharply UP
- budgets will be transferred to projects solving Y2K in a massive way.
- DOS and Win3.X has to migrate to windows 95/98 anyhow.
A nice way for an enterprise to do this is by implementing Citrix: less support personnel needed (help desk etc); those guys can be transferred to Y2K projects.
Any thoughts?
John
------
To: John Mansfield (4692 )
From: Mike Buckley
>>This is the first time I have seen anyone come foward and hint that networking sales will be put on hold for more pressing issues related to Y2K.<<
In AOL's Motley Fool Networking folder, this was discussed months ago if not a year ago. The idea was proposed by Ctraut who also posts in this folder under a different screen name I can't remember at the moment. I believe she referred to it as The Big Pause. She mentioned it more in the context of slower growth for computers, not just networking sutff. When she posts, I stop and read it twice because it's always great stuff.
exchange2000.com
-----
To: Mike Buckley (4696 )
From: John Mansfield
Hi Mike,
Yes this goes along with my line of thinking. Still there is little discussion about this effect of Y2K on stock value of many IT companies.
I suppose this is mainly because many analysts still do not believe Y2K is a big deal (I have seen several remarks on this board and elsewhere stating that 'there is only this Yardeni guy who thinks there will a recession around 1/1/2000; nobody else; so it is not a big deal'.
Also on CEO level of many Co's, many reputations and (personal) interests are involved.
- They would have to admit that their current strategy is wrong.
- Also, in co's that are going to see a decrease in stock value, the CEO and other management will see the value of their stock options deteriorate as well. So they do have an incentive to delay bringing such messages to the investment public.
This is all speculation; not much hard evidence is there. However, these are my feelings right now.
Regard,
John
----------
To: Trader Dave (117 )
From: John Mansfield Tuesday, Dec 23 1997 3:45PM EST
Reply # of 120
'...make noise about entering this space'
Hi dave!
>>
I also beleive strongly that a number of the larger players (PSFT/BAANF) are running out of growth at the high end and will make noise about entering this space - that's a major change in distribution channel - they'll probably fail, but it could make for ugly psychology. Look at the performance of Vantive stock, flat to down over time despite fabulous growth, but the psychology is more negative than ever due to increasing competition and fears of pricing pressure.
<<
That is my feeling also! When going forwards towards 1/1/2000, it will be increasingly difficult for larger and even smaller firms to replace old systems with newer systems such as Baan, SAP.
exchange2000.com
------------
And here are some related postings:
------------
Y2K-INTERNET - 'Year 2000 Problem Slows Internet Development'
entmag.com
exchange2000.com
Y2K-PCDOCS 'Co's have to first establish their Y2K budget allocation, then remaining can be allocated for other things'
Interesting note on the PCDOCS stock. How much 'remaining' will be left for such products and companies?
exchange2000.com
Y2K-GOLD - Cisco earnings warning
<<
broke down and bought Barrons this afternoon..there was mention
that Cisco just warned its investors on the impact the year2000
might have on their sales..
>>
exchange2000.com
------------
Thread: SDRC - Structural Dynamics Research Corp.
To: Jerry Rush (397 )
From: John Mansfield Saturday, Dec 20 1997 4:02AM EST
Reply # of 404
Hi Jerry,
Well I guess you are right. SDRC products are a big cost cutter. Also, with Y2K increasingly on the mind of every CEO, quality programs will become more important. PDM products can deliver increased quality thru better management of product information.
Regards,
John
exchange2000.com
---------
Thread: Boeing keeps setting new highs! When will it split?
TO ALL: Ed Yardeni on CNBC today - remarks on Airplanes and Y2K
exchange2000.com
....
(in yardeni.com
'In an April 3, 1997, response to a Congressional inquiry on embedded microchips, the FAA noted that they have "no formal plan to assess vulnerability of microchips embedded in airborne electronic equipment." However, both Douglas Airplane Company and Boeing Commercial Airplane Company are aware of the problem and are contacting their suppliers. Autopilot systems do not use a year function [http://www.faa.gov/ait/year2000/AppA1.htm]. '
Does anybody have an idea about the impact of Y2K on stocks of co's such as Boeing? They might have to do some repair jobs on the airplanes out there.
----------------- |
