Mark,
"who's going to make some predictions?"
Well, I'll make a fool of myself, and make a timid stab at it. Mostly already well known things but here goes:
1. We're still in a trading range, but the range will be upped a little. SEG seems to broken out a little, but I suspect that is because of their plans to spin off a part of their software division. By making it public, it will give people a better way to value it (as Z wanted QNTM to do with DLT--still wish QNTM had done it/would do it even now, but....). That is probably worth $4-6 by itself ($4 would value it at about $1b, or around 3x sales--it may be worth more than that on the open market, at least in this market).
2. The range will be upped--especially if WDC gives the same look at the channel and their inventories as QNTM and SEG--because people seem cautiously optimistic that the supply/demand balance will clear up by next fall.
3. The range won't be broken on the upside yet because that optimism is tempered by being caught flat-footed last fall by Fujitsu and Maxtor suddenly going after market share with price (yes, SEG did too to some extent, but I still maintain that that was a different story than the other two, but won't go into it here--it wasn't a matter of corporate strategy that led them to do it).
4. If it becomes apparent that Maxtor or Fujitsu will either get bought or will have problems expanding capacity due to the financial difficulties of their parent, then they will all shoot upward. (I am assuming that Samsung will not be a factor in this business in the foreseeable future, and that companies like Toshiba and Hitachi will remain niche, mostly captive suppliers.)
5. At some time in the next 3-12 months, point 4 will become apparent, the drive vendors will make good money again, and we will talk about the Big 4 or Big 5 (including IBM, and perhaps one of the others).
One more thing--thanks for starting this thread. Not that my investing performance has actually been improved, but reading and contributing to it has at least made it more fun and informative. At least I feel like I know why I'm not making as much money as I coulda shoulda if only....:-)(
Best wishes,
Sam |
