WDC leads disk drive stocks higher. Hot air, random walk, brownian movement, incisive analysis combine to levitate share prices higher......
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December 1, 1998
Western Digital Up 21% As CEO Says
Outlook Improving
Dow Jones Newswires
By Christopher Grimes
NEW YORK (Dow Jones)--Western Digital Corp. (WDC) shares rose
25% after the company's chairman and chief executive said demand is
improving for its disk drives and that it is beginning to gain market share with
major PC companies.
Speaking at the Credit Suisse First Boston Technology Conference in
Scottsdale, Ariz., Western Digital chief Chuck Haggerty said the company
has also improved the time it takes to get its products into the market, said
spokesman Robert Blair.
Blair said Haggerty also told investors that it will introduce desktop disk
drives with International Business Machines Corp.'s (IBM) head
components into the market sooner than expected. The new drives, featuring
IBM's giant magneto-resistive heads, should hit the market in early 1999
rather than sometime in the first half of 1999.
Western Digital agreed in May to use IBM's industry-leading disk drive
heads. Blair said using IBM's technology should improve Western Digital's
market share and further speed the time it takes to get new drives into the
market.
Western Digital has posted three consecutive losses after falling behind on
magneto-resistive heads. The head is possibly the most crucial part of the
disk drive, since it reads and writes information on the disk.
But it hasn't been alone. Rivals Seagate Technology Inc. (SEG) and
Quantum Corp. (QNTM) have also been hurt by a PC disk drive inventory
glut and intense pricing pressure.
Furthermore, a resurgent Maxtor Corp. (MXTR) has taken share at the
expense of its larger rivals.
Western Digital Shares were recently trading higher by 3 3/4, or 28.7%, to
16 13/16 on volume of 5.4 million shares.
Seagate shares rose 2 3/8, or 8.1%, to 31 7/8, Quantum rose 1 7/16, or 6.5%,
to 23 9/16, and Maxtor rose 1 15/16, or 14%, to 15 3/4.
- Christopher Grimes; 201-938-5253
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