> I don't buy into a lot of market manipulation stories.
Then I guess you are new at this..
don
No, I just have seen too many market manipulation stories turn out to be uninformed. Humans like to believe that somewhere somehow there are great powers making great things happen.
The reality is that power is the give and sway of chaos, millions of non-linear decisions being made at the same time every day.
From a pure by-the-numbers, SGI is pretty highly valued at 16. What earnings are you expecting 5 years from now that discounted to the present will make this stock worth 16 today?
I am disappointed in SGI - I think the SGI brand name alone is worth the current stock price - if they would stop tarnishing it. I figured Compaq or HP could have acquired SGI and made a mint selling graphics NT stations under the "SGI" brand.
However, SGI had to go it alone. That may work for Apple, because of their loyal consumer following, but that's not the market SGI ever addressed.
Also, I am shocked that they produced an NT workstation that manages to remove almost every business advantage from going with NT: low cost components, modularity, industry-leverage, and quick-turnaround.
ASPs in this space are going down down down, and I don't think SGI is doing what it will take to get the unit growth to make up for it anytime soon.
It will stabilize, but it hasn't yet. Apple saw it's sales go from $11B to $6 before stabilizing.
SGI is now caught between competing with Sun and HP, and competing with Compaq, Dell, HP supported by a slew of graphics card vendors.
Oh well. I'm not so gung ho that I will short SGI at 13 tomorrow. But if I get my 16 limit short, I'm pretty sure I will see a 25-50% return over the next 12 months. |
