At today's prices 28% of the market value of SEG is accounted for by those 33 million VRTS shares
Archimedes would be proud of the way SEG has turned less than 3% of its revenues into 28% of its current market cap. I had some reservations at the exchange ratio (not the business combo)at first because of the dilution and subsequent stampede, but Veritas is shaping up to be a mighty fine stock ;albeit, one with some rather healthy swings (read: nice entry points for the patient). Am looking forward to another dip in the high thirties for another fifth.
On the disk drive front, nothing much has changed: there are still too many players for anybody to be consistently profitable which means that corpses are still required. There has been a flurry of product announcements the last few days from WDC, QNTM, Fujitsu, IBM and Seagate indicating that no matter how bloodied, the quest for market share continues.
SEG-wise, Luczo indicated, soon after he took over, that he expected SEG to lag in the 3.4 GB/platter (RDRT is now the head supplier for this one) and the 4.4-4.5 GB/platter (low volume enterprise drives announced today, probably internally-sourced) categories, BUT that he believes that SEG can be first at 5.0-5.1 GB/platter exiting 1999. It is no secret that SEG believes it can knock loose some significant desktop market share from the other players once it gains the density lead on the desktop. I believe this increases the likelihood that the disk drive industry will be leaving the 20th century in the midst of yet another price war; albeit, one with a more decisive edge to it considering the weakened finances of some of the other players. |
