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Technology Stocks : The New QLogic (ANCR)

QLGC 16.07

0.0%

Aug 24 5:00 PM EST

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To: janski who wrote (13728)	1/17/1998 9:41:00 AM
From: Steve Scribe	Read Replies (1) of 29386

Since the latest Kinnard report from 1/6/98 says the following: <<The Kinnard report also indicates that the likelihood of Ancor getting an OEM contract is greater than ever. Kinnard set a price target of $10.ÿ If Ancor receives an OEM contract for the MKII, they say that the stock could be well over $15. (No time frame was given for either projection.)>> Using 2 sets of assumptions I calculated the odds of Ancor getting at least 1 OEM. The first set of assumptions is that Ancor has a 1/2 chance of getting each OEM and that there are 10 OEM opportunities. (1 - (1/21/21/21/21/21/21/21/21/21/2)) = 99.9% Therefore the competition has a 00.1% chance of stringing 10 OEM victories in a row leaving Ancor a 99.9% chance of winning at least 1 OEM. My more pessimistic model assumes the competition has a 3/4 chance of beating Ancor for each of 10 OEM opportunities. (1 - (3/43/43/43/43/43/43/43/43/43/4)) = 94.4% Therefore, even if you assume Ancor has only a 25% chance of beating Brocade for each OEM, Ancor still has a 94.4% chance of getting at least one MKII OEM and the stock price moving well above $15 per share per the Kinnard forcast of the impact on the Ancor stock price of a MKII OEM contract. All IMHO, Steve

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