<<CMon: Here's the deal: HDTV=ZE=Big Bucks. Get it?>>
Um, no.
Zenith will face the same competition in HDTV that it has faced in the past in regular television manufacturing where they have consistently lost money. This might be different if they set the standard, but Intel, Sun, Cisco, Hewlett Packard, and plenty of others would like to set this standard, too. Who do you think will win in that matchup? Certainly not Zenith.
I see a consistent money loser that has survived only through receivable sales, sale-leasebacks of its facilities, and the generosity of it's Korean patron who's own troubles are indicated by the 29.5% rate it just paid in its own recent financing. Given LG's role in keeping ZE alive until now, concerns about what problems they may face in Korea don't seem at all overblown to me.
As for the stock, waiting for HDTV to come to the rescue doesn't make alot of sense when you have near $500mm of debt ahead of you, no significant assets to support that debt, and an almost $400mm market cap to the equity behind that debt. The equity value alone seems alot for a product that's somewhere in the future and a market in which ZE may or may not be a player. |
