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Technology Stocks : C-Cube
CUBE 36.64-0.5%Dec 5 9:30 AM EST
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To: Randy McWilliams who wrote (8461)1/8/1997 10:30:00 PM
From: robt justine   of 50808
 
Randy: That's a good question. Unfortunately it's a question that can't be definitively answered by CUBE's 4Q numbers. And this is where the shorts are able to terrorize thru articles like Herb Greenberg's trash talk over the last few months. They are able to feed on the uncertainty of slipping market share. VCD sales must continue to remain strong for CUBE to be the real deal. Management has acknowledged long ago that their former 90% VCD dominance would probably slip to 75% in 1997. This is a natural business evolution in a booming market. But it is an environment where shorts can take advantage by charging that CUBE's dominance will "soon" be history. The only way to chase the shorts into the tall grass is through solid numbers of market share shown through professional market research by a reputable firm such as DataQuest and through solid numbers out of CUBE each quarter. Solid 4Q numbers include gross margins remaining in the 50% area, operating margins in excess of 25%, revs comfortably north of $100mm, net income north of .44/sh, and inventories comfortably below the $32mm reported as of 9/30/96.
If this is served on the shareholders' plates next Thursday it will show that the ESST decoder threat is just part of the natural threat of an evolving market and CUBE will start to sweep that gnat off its ass and I will believe, finally, the weak (and often-used corporate) excuse for the heavy insider selling this Fall.
Good luck to all!
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