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Technology Stocks : Ampex Corp: Digital Storage
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To: Mary Beth Ford who wrote (1720)2/11/1997 8:40:00 PM
From: Hal Campbell   of 3256
 
When ever I get those dark KM forebodings Mary Beth, a couple things spring to mind. Uninvited approaches made to AXC by several interested parties is one. 38% extra for manufacturing costs of pennies per platter is another. Negotiations and hard drive production plans can be very complex of course ...lots of factors that can delay ..but in the intermediate term, that's just too cheap a price for easy improvement to ignore. I'm guessing, but Ampex's insistence on contractual value added resupply and manufacturing options might well be a sticking point. Truly the drive makers will have to be VERY impressed to guarantee those kind of cartwheels to use KM. When making KM profit projections, I personally kinda assume AXC will come up well short of its $1 per platter target - if they hit it, what fantastic gravy! And I think they are likely to achieve a very high degree of market penetration.I also think KM has little to fear from any competing tech, unless the two are mutually exclusive - thus of course the importance of Karen's admission to an AOL caller that they had already achieved a 20% improvement with MR heads. And as Gus has mentioned, the AXC engineers feel they have good reason to believe that KM would be a necessary precursor to any future thin film advance. Ahh but the uncertainties AXC investors feel are just magnified in the general market - and the price may not move really appreciably - even after other deals (which won't have hard numbers either) until revenues actually begin to roll in. And they will.
Admittedly this is preaching to mostly the choir, but I continue to see AXC as a growth stock with very very little multi year downside .. at least a very good market beating multi year upside .. and the real potential to be something spectacular. Feel comfortable holding it through these dead to declining days. Will buy more if it slips below 7.
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