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Technology Stocks : CYRIX / NSM

NSM 18.27

0.0%

Jul 31 5:00 PM EST

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To: burn2learn who wrote (6523)	1/19/1997 7:18:00 PM
From: Robert G. Bianchi	of 33344

Mike, I don't think they would have experienced this demand unless Cyrix aggressively priced their chips. Cyrix had problems procuring the ceramic packages. It is pretty amazing that a company with 700,000+ chips in inventory would have put themselves in this position, but they did. Interestingly enough, Intel had similar problems (just no inventory). If you are a ceramic chip vendor, who will you short ship Intel or Cyrix. I think the answer is pretty clear! At the beginning of the 4th quarter, Cyrix has no choice but reduce inventory at any cost and raise cash. Cyrix was smart to do what they did. Cyrix could have appeared to make more money last quarter by selling less of the expensive chips, but they already were beating the streat earnings estimates and wanted to put their balance sheet in order for 1997. It was a smart move! I have heard estimates of six months, which is inline with Jay Swents comments in the Conference Call. Jay has demonstrated his style of being conservative about his statements, so expect a pleasant surprise. Bob

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