Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 322.51

+6.1%

Feb 6 9:30 AM EST

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To: Robert Schling who wrote (23322)	8/26/1998 9:43:00 AM
From: Katherine Derbyshire	Read Replies (2) of 70976

The "spectacular 1996/97 recovery" was almost entirely a grab for market share. In the face of collapsing prices, several companies decided they could afford to lose more money than their competitors, so they built lots of capacity with borrowed money knowing that chip demand didn't justify it. This spending spree is directly responsible for the current overcapacity situation. The price collapse, combined with the Asian currency collapse, now threatens the very existence of some of the companies who drove the 1996/97 recovery. In other words, as several people have pointed out, the market fundamentals are much worse than in 1996, and AMAT's stock price is relatively much higher. Katherine

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