Dear John, to answer your questions, I would like to bring to your attention that the despicable tanking of coms is not a 3com's specific phenomenon. All semis and disk-drives tanked in tandem with coms. So I came to the conclusion that a general slow-down in high-tech demand is causing all the problems for these companies. All these companies, like USRX, due to years of bull-market were highly geared up to supply a booming market - and once the Asian bugs and other flu hit - all hell broke loose.
Now with most of these companies greatly adjusted their inventories, shutting down factories (seg, intc, Korean, Japan etc.),and jumping eagerly into new product upgrade cycles (semi to 0.25m, networkng 1000baseT, and don't forget Window 98 will come this year) - supply and demand shall come back to balance later this year.
Most semi companies had already broken out in anticipation of these. Coms is consolidating right now. Though its chart looks alright it's lacking the general high-tech market. It could be due to its odd-shape reporting period (reporting next month) and it would eventually catch up.
This month is still young, profit warning can still come anytime. Maybe selling now and buying back early next month is not a bad idea.
But I think this Feb. should be good for high-tech.
FWIW, just my humble opinion.
Mang |
