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Technology Stocks : SYQUEST
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To: Troy Shaw who wrote (5523)2/12/1998 3:03:00 PM
From: Michael Coley  Read Replies (2) of 7685
 
RE: SyQuest Negative Gross Margins

Troy,

What you're missing is that the cost of goods (per unit) was higher than it will be in future quarters (theoretically) due to ramping costs. They could also gain some efficiency through higher volumes.

Unfortunately (for SyQuest) they will probably have the same situation again this quarter due to ramping of Quest and the slow ramp of SparQ. Also, there doesn't seem to be much hope of significantly increased volumes this quarter.

From the conference call notes posted earlier, it sounds like SparQ's margins, even if they get the volume and gains that they expect, will be minimal. It certainly sounds like a lose-lose situation to me.

- Michael Coley
- wwol.com
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