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Technology Stocks : Read-Rite

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To: Stitch who wrote (3949)	8/16/1998 2:08:00 AM
From: Frodo Baxter	Read Replies (2) of 5058

It pains me to see you bearish on RDRT at around 6 and turning bullish around 8.5. FWIW, I think this sorta-bounce in tech is not real. DRAM prices going up? Bah. There's chronic overcapacity here and for the foreseeable future. Pentium II/266 chips on allocation? Bah. That's because Intel is transitioning to .25 micron. Intel has too much capacity; that's why they can't get their ASPs up. Shortage of 3-4G drives in the channel? Bah. There's overcapacity here, too. Besides, Niles wasn't looking at the right place. Ask WDC about their inventory situation. RDRT's story is fundamentally screwed. They lost both QNTM and WDC, the two biggest consumers of merchant heads. SEG may be their salvation. RDRT makes better heads than SEG; that much is obvious. But as Craig Christmas will tell ya, they'll screw you once they figure out what they're doing. Just ask KMAG. The best solution is for SEG to buy RDRT outright, but nobody seems willing to make such bold moves. BWDIK, maybe this is the precise issue that sent Shugart out packing.

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