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Technology Stocks : Disk Drive Sector Discussion Forum
WDC 262.70-8.1%3:59 PM EST
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To: Frodo Baxter who wrote (2382)1/27/1998 5:13:00 PM
From: Mark Oliver  Read Replies (1) of 9256
 
Was nice to finally see a merger where the company being bought had increased value to it's shares. Seems like so many of these deals have resulted in take unders. I wonder if CPQ will buy Cabletron?

So, you rightly note that the DEC/CPQ deal will increase Qntm's concentration on these guys. Is that good or bad in your mind? I would think the deal will cause some shift in sales as CPQ sells to DEC customers, but in general it would seem to improve CPQ's ability to sell due to improved support factors.

The most interesting thing I see is the development of Alpha chips in competition to Intel's 64 bit chips. Intel and HP are working together. Now DEC and CPQ? Would also seem to put more strenght into NT based servers vs Sun.

But in the end, how it will help or hurt storage seems unclear. I would assume the big problem will be lower margins as the customers get bigger. Now, we'll see DEC pushed faster toward a BTO format which will further push the inventory problems, but this is all inevitable.

I'm not one to short stocks, but if I was I would have shorted Hutchinson. I have been surprised at their ability to weather their poor earnings and forcast.

Regards,

Mark
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