"What is QNTM and WDC going to say that has not already been factored in."
I don't know about WDC--in fact, I started composing a "what might be positive about WDC" reply to you on the DD thread, and tossed it since I found I couldn't say anything especially positive other than they might turn out to be a successful manufacturing vassel to a great R&D company--but QNTM could say some good things or some bad things.
We already know that they are going to write off the head operation. They plausibly finally made money on their drive bizz (one hopes that they did after SEG's report, in any case), but the biggest story will probably be how ATL and DLT did. SEG already reported that they will "go slowly" on LTO, and don't expect any serious revenue from it in the foreseeable future, and maybe won't even have a ramp for as much as a couple of years. That suggests to me that their specs just weren't good enough to beat either DLT or Mammouth, and that the technology is much tougher than they originally expected. EXBT has already said that they are going to lose money this Q, and (I think I remember this, anyway) the one new product that I recall that they are coming out with soon is a new DLT library--which suggests that DLT is still King of the Tape Business, and Mammouth has a steep hill to climb.
I was pleased that QNTM got over the 26 1/2 resistance in response to SEG's report; I suspect it will sit around here until the CC and we see just how profitable the desktop business became (assuming that it was so), if the high end drive business is closer to breaking even, if DLT is pushing past the 14% growth it showed last Q, and ATL is maintaining its blistering growth in its first full Q as part of QNTM. We may also hear what their plans for Bigfoot are, how long it will be continued or what its successor will be, as well as something about their plans for attacking the sub1000 market. If the answers to those questions are positive, then my guess is that QNTM will head back into the low-mid 30s, and the price we are at now becomes the lower support of a new, higher trading range for awhile (until it looks like DD supply/demand is really in balance); if negative, then it goes back to the low 20s. Of course, it could also be a mixed bag of answers. But it seems to me that this CC has a lot more open questions than CCs usually do.
Best,
Sam |
