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Technology Stocks : S3 (A LONGER TERM PERSPECTIVE)
SIII 0.00010000.0%May 12 5:00 PM EST
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To: stockroach who wrote (8638)1/4/1998 1:30:00 PM
From: Jan A. Van Hummel  Read Replies (2) of 14577
 
Stockroach

One can only speculate as to the underlying reasons for this move.

If the perception is that there will be excess fab capacity in years
to come there is little need to "own" capacity with the take or pay
risk.

Perhaps S3 sees a shift in the market that makes them feel comfortable
enough that they will be able to buy product in the open market.

I think it is better for the company to enter in long-term supply
contracts rather than owning capacity. Their skills are clearly not
in the fab business.

With the current reduction they may have lessesed their exposure
to the potential risks in owning fab capacity. Mind you, they were in it
for better or worse. If they owned more capacity than they had an
internal need for they were at risk.

This move lessened exposure and strengthened the balance sheet.

Now at just over 5 the stock is extremely undervalued and we should
see higher values soon.

Likely this was reflected in ALSC's stock as well.

Given the recent moves I see a trend, one that indicates that management
has finally a plan and is following it.

The additional cash should place them in a position to make some new
investments/acquisitions.

Good to see things are heading the right direction.

JMHO

Jan
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