> I agree that SGI needs to "perform" (defined by market
> expectations), but the issue appears, at least to me, to be
> execution, not technology. (Soberly remembering of course,
> that the best technology doesn't always win, but often the best
> marketed does... but then you're back to the same contradiction.
> They can't build the systems as quickly as they are ordered,
> and you want to advertise more?!?)
SGI never talked about backlog when they used to make $.40/share/Q.
Companies that do a lot of business with the government say that.
You don't know if that gigabuck backlog is for O2's or Crays.
You don't know if it's for delivery in '97, '98, '99, or later.
You don't know if it includes the service contract at Los Alamos,
which may not even be profitable. When they announce crummy
results next quarter, perhaps they'll stop talking about backlog
and brag that their shipments to Dreamworks are up 100% or something.
Business needs to make a buck, regardless of "market expectations",
and SGI is failing woefully. Ed McCracken is a marketing guy who's
made a series of poor financial decisions, including the $75 million
stock buyback at $30/share, the merger with bleeding, shrinking Cray,
and continuing to rely on Stan "Two Bits Per Share in Q2" Meresman.
If he can't figure out how to sell machines at a profit he ought to
hang it up and peddle the whole place to HP while market cap still
exceeds backlog. |
