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Technology Stocks : Western Digital (WDC)

WDC 270.16

+7.9%

3:59 PM EST

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To: Frodo Baxter who wrote (8594)	1/30/1998 1:04:00 PM
From: John Wang	Read Replies (2) of 11057

Lawrence: <<and $73 is cash in March and June.>> If you listened to the call, you would not think it pathetic. This will be used for the price protection to channel distributors in case HDD price dips at the same pace the next two quarters. This gives channel guaratee to continue to carry WD's products. From what I heard, this could be the charge they may only take for the next two quarters. Most likely, we may not see the same for March or June quarters. It is kind of dump all your garbage all at once. And, that is why the cash position is reduced to 108 mill. Another positive thing I heard is that their current channel inventor is at 7-8 weeks while SEG said 10 weeks (reduced from 14). This is by no means great. They wanted it to be 4-5 weeks. Of course, their tone in conf call was very low key. And, I sensed that they wanted to paint the worst picture including the gross margin. Last night, I thought about the whole call. My conclusion was that the stock would pop up today. This is not hindsight. John

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