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Technology Stocks : Vitesse Semiconductor
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To: Clay Cunningham who wrote (310)11/27/1996 12:41:00 AM
From: Clay Cunningham   of 4710
 
I checked this company's web page. It's nicely done and very
informative--but, surprisingly, its press release section had not been updated to
include information about the additional stock offering.

This company could be successful in the long run. As for now
though, it is in a difficult situation. The new plant will not be
completed until the middle of 1998. That's a long way off. For now,
its sales growth will be limited by the current plant capacity. The
company is starting to hire and train the engineers it will need.
At 70 times earnings, the company's stock price will not be able to
go much higher until the new plant is built. It is an extremely risky
investment at this level. So, why buy the stock now? Why take
the risk? Even if all goes well, is this $75 million dollar plant going
to provide the company with the economies of scale that it needs?
The company can be compared to Cyrix--a high flier with
a technological advantage but could not compete with the big guys.
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