Doug/all, these are some of my concerns with ADPT: comments/discussion welcome:
1) Seems to me the street sells the acquirer in a big merger until they show them the money. Most acquirers I've noticed set new lows, then stay flat for at least 6 months. Some recent examples are 3COM/USRX, Boeing/MCD, and Compaq/DEC. I'd appreciate recent exceptions pointed out.
2) Didn't ADPT pay twice the previous purchase price for Symbios? Are we sure that's such a fire sale?
3) A monthly H/W S/W sales catalog I get called Tiger now has Adpatec MISSING from its vendor index. They now carry a full line of SCSI adapters from SIIG labeled "your fast affordable upgrade solution". I can't even remember not seeing Adaptec for SCSI offerings in recent years.
4) Regarding SCSI management software, my April issue of Emedia (formerly CD-ROM pro) magazine, has a glowing review of Micro Design International's SCSI Express 3.0 for Windows. They mention "an ever-wider range of hardware support makes SCSI Express a fearsome contender in the enterprise storage market".
5) The March 1 issue of Solutions Integrator had an article on the Compaq/Digital/Tandem merger's ramifications as a storage powerhouse. They state "The combined component buying power may well shift power from the component suppliers such as Intel, Adaptec, Seagate, and others to the server supplier. Hopefully your margins won't shrink."
The recent trend towards DELL's build to order methodology with minimum inventory also tends to reinforce the trend of who will be in control IMO.
6) I'm also concerned about the trend towards sub $1000 PC's, and even more about sub $1000 servers like DEC announced last week. One has to wonder if ADPT can keep up the high margins. By the way the street cut 60% off ADPT's previous highs without any signs of recovery, maybe they have more information than we do.
7) The slew of lawsuits don't help.
I've held ADPT off and on over a few years, always long. With all the issues now surrounding ADPT, this is the first time I'm concerned if I'm gambling.
comments/discussion welcome,
Tom |
