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Technology Stocks : ZENITH ELECTRONICS

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To: Chris Alexander who wrote (63)5/5/1996 7:44:00 PM
From: olduser   of 578
 
Another difference between this and Iomega is that Iomega has a virtual monopoly in their market. Zenith already has a few competitors including Motorola and most likely some others in the future. Also, we have to consider ZE's financial status. It's been a while since they made a profit. Their CEO is expecting them to lose money this year as well as the next. Their slower cable modem is expected out in 3 months. But their high-speed 2-way has not even been tested yet. And revenue for that (assuming it works) is not expected to come in until late 1997-1998! Meanwhile, their stock has almost tripled in less than a week.
There is no doubt cable modems will be "revolutionary." But the real question is whether zenith is worth their stock value at this early a stage when returns will not be seen for at least a year? Meanwhile, Motorola and the others will be swarming into the same market. Can Zenith compete against the big boys? Isn't their stock ready for a correction considering how long they have to go until they prove their worth? If there is even the smallest hint of bad news, this stock will tumble hard.

Also, why is management so tight-lipped about their financial status?

Wan
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