To All:
I just became aware of this information via the IOMG thread on SI. Apparently IOMG is announcing an OEM deal w/ Gateway tomorrow. This would allow Gateway to sell the hit products produced by IOMG. While Gateway has been offering Ditto backup drives (produced by iomega) for a while, they have not made deals to offer the much more popular Zip and Jaz drives.
This is an obvious plus for IOMG, but could also be good for Gateway. People genuinely want these products (their usefulness can be debatable), and Gateway is one of the few computer manufacturers that has yet to offer them.
The more and more I think about it, the more it strikes me how undervalued Gateway is! 45 is incredibly low, and it is poised to move lower due to election anxiety. While this quarter's sales potential is also debatable, the negatives seem overdone. P200 chips are popular, but I seriously do not think that Gateway will have to refuse orders! It actually could be positive, since margins will remain higher since there will be no price cuts.
Also, a new ad campaign would be terrific. Gateway is a FAMILY type company with a FAMILY image. They need to exploit that, instead of running ads saying how employees love Gateway or something. There are still too many ignorant people going to circuit city or Best Buy buying acers or packard bells.
In general, I would expect GATE to make a strong recovery in the coming months. All this fear about people not buying computers is ridiculous. As Christmas comes closer, there will most likely be reports about how sales are very strong. Since analysts are fairly neutral on the stock now, upgrades will only fuel the rally.
Whatever, I'm long until Christmas!
-Brian |
