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Technology Stocks : Applied Magnetics Corp

APM 1.420

+1.4%

Nov 11 3:59 PM EST

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To: 777 Captain who wrote (11771)	4/22/1998 7:16:00 PM
From: Donald Isenhower	Read Replies (3) of 12298

To all: Well reading this message might just be about as useful as visiting APM's web site to poke around for information in an attempt to figure out why this support around $11 is so strong. What is it that we don't know about? I'm trying to figure out what it could be. RDRT at least holds out some hope for the future in their recent flow of red ink. I don't find very much in APM's release to point to just exactly why things will be better in 6-9 months. So I wanted to start a list of candidates of what it is that the "street" seems to know that I don't (I don't have a strong stand on any of these, they're just ideas to throw out for people to roast in flames if they so desire): 1. Something fishy on the 2.1 TFI product that seemed to have been completely dead some time ago (I just reread the last quarter's APM release and it clearly states that the 1.7 Gb should be the end of that product line). Could this have a bigger market than we realize? 2. Could APM be in a good position to move to GMR just about as quickly as going to MR so that they are in a good position for the next phase of disk head technology, i.e.,could they be expected to somehow be in a position to be a solid supplier of GMR heads like they were for TFI, never being all that big in MR? Their increase in research spending seems more than what is needed to just change to MR. 3. Is it that some of the non-vertically integrated companies are going to buy one of the independent head manufacturers and APM and RDRT are two leading candidates? (to be honest, with the recent flop of needs for TFI, companies like WDC seem to have made a good choice to avoid buying or building the infrastructure to build their own heads) 4. Is it just that the independent disk manufacturers are known to be committed to keeping a company like APM around that has been an independent head supplier for many years? i.e., it is a "certainty" that APM will be able to work out their current yield problems and whatever else is needed and that when they do they have a known set of likely customers? 5. Is there something happening we don't know about in APM combining with another company? e.g., could RDRT now be in a different mood and think it would be beneficial to have a friendly merger? 6. Is one of the companies that are trying to stake out a claim in the disk-drive (or d-d component) market looking at RDRT or APM to pick up infrastructure cheaper than building it? All of the above I can make what seem like good arguments against, but with the red ink from this quarter and the promise of a worse 3Q, there has to be something going on because there are just too many good opportunities in this market to justify people sitting pat on this one, even if fools like me have stood by and watched many exit points go by! Donald

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