Ross Technology? Let's talk! Message Board

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Technology Stocks : Ross Technology? Let's talk!

RTEC 28.50

-0.5%

Oct 25 5:00 PM EST

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To: Hemant Kapadia who wrote (153)	11/26/1996 10:37:00 AM
From: Peter Bernhardt	of 475

<< In that time they have gone from ~$7 to ~$3.5 and the points regarding the x86 dominance go a long way in explaining this occurance. Ross occupies 2 floors(as you know) of a office complex in Austin, is in debt to their ears and is competing with companies orders of magnitude larger. >> Hemant: The immediate reasons for the drop in RTEC (which really began earlier in the year at about $14 per share after Sun Micro announced that they would not exercise their warrants), is better found by looking at the changing relationship between Ross and Sun, with particular emphasis on Sun's transition to its 64-bit UltraSPARC system. At the same time, Ross is in the midst of its own transition from its primary role as a supplier of microprocessors (OEM based) to that of a systems seller (distributor/reseller based). That said, I'd like to hear more about the potential threat to Solaris-based computing from newer generations of x86 processors (particularly from the engineers reading this board). I noted in the recent conference call that Roger Ross hinted very strongly that the company would be (or is) breaking out from its exclusive focus on Solaris. Also, as for the company's balance sheet, I don't see the large amount of debt you refer to. But Ross did end last quarter with only $164K in cash. The depletion of their cash reserve had everything to do with the above-mentioned transition and with moving systems in the various distribution channels. Also, Fujitsu has agreed to provide a guarantee for a $25 million credit facility -- which should be more than adequate to fund operations during this difficult transition. At the present moment there certainly might be a better place for one's investment dollar. But given the potential for Ross -- both in the upgrade market, as well as an emerging systems manufacturer -- I believe this is a good investment for patient, risk tolerant investors. - Peter B

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