This issue brings us back to the post i made.
I still wonder if they are desperately getting
rid of this excess inventory by selling it
for 50% off. Interestingly enough, the discount
offer ends on Mar. 31 , 1998, the end of the
fiscal quarter.
Regardless, the fact that they would offer a
50% discount means there is pricing pressure
in the industry, which usually drives down
margins, and hurt the smaller companies.
A company that is enjoying healthy sales
do not have to resort to such drastic sales
cuts.
The question is, is the 2048, a new product
or an old model? Indeed, they maybe getting
rid of their inventory at much lower prices.
I hope it is not lower than their cost of
goods sold. Otherwise, that means they are
selling at a loss.
I still think MRV is undervalued, but then,
how do you really value a high-tech company
in the networking industry where a MADGE, or
a CS can drop like a rock? |
