RE: What to Expect This Quarter? Next? Long-Term? My Predictions.
>> I expect that by the end of this quarter we should have a pretty good indication of how this thing might play out. <<
I think it'll be six months to a year before SyQuest has even a remote possibility of breaking even. They've already given us the best indication one could ask for about the quarter just ended. Expected shipments were 50,000 units. The numbers were analyzed here at that time, and SparQ will add perhaps $10 million at best to this quarter's revenues. When you consider the product ramping costs and the cannibalization of existing product lines, I'm expecting revenues to be in line with previous quarters (around $25-$30 million) and losses to be even lower ($15-$30 million). Also, expect more dilution and a worsened balance sheet.
That's my prediction. We'll see for sure in 3-4 weeks.
As for the quarter we just started, I certainly expect to see SparQ sales increase if production is able to increase. Although the shelves haven't been empty here in Arlington, TX, I've heard reports from elsewhere. I don't believe SyQuest is able to keep up with demand yet, until they increase their production beyond 50,000 units per month. I wouldn't be surprised to see SyQuest revenues jump to around $45 million for Q2 (which ends March 98). I still expect losses to be very negative, perhaps $10 million.
As for longer-term (6-12 months and beyond), SyQuest will need a tremendous amount of cash to dig their way out of this hole and ramp SparQ up to profitable levels. They may be able to get this cash through warrants, but it will be at the expense of current stockholders. I still contend that total and complete success is already priced into this stock. Anything less and there's nowhere to go but down.
- Michael Coley
- i1.net |
