When I first heard about the 3COM/USRX "merger" this am, my first thought was that this was certainly a defensive move. Have felt for a long time that their technologies could easily be obsoleted by Intel by their putting it on one of their chips. Then I read this:
biz.yahoo.com
And I quote from the end of this article:
<<In addition, technology changes in the industry and the growing threat of competition from outsiders such as chip makers Intel Corp and Rockwell International Corp have weighed down the prospects for the industry as a whole.
Some analysts cited fears that Intel may decide to integrate network adapter cards or modem chips directly into the computer chassis its builds, rendering stand-alone products from many network suppliers a commodity, if not obsolete.>>
I believe that this is what will happen in the not too distant future.
IMHO, this merger is a real sign of Intel's power to influence things.
...Now, what can they do to influence the market?
The 1Q96 earnings report will provide the next big opportunity . This report has to be filed no later due 45 days after the end of the quarter, which puts it on April 15 latest. Am I correct?
If the numbers are as good as expected (at least 40% over 1Q96), they will certainly influence the market in a most positive way. But since we know that the market trades on the rumor and sells on the news, we ought to expect the anticipation of great earnings to cause a rise in stock price. However, there have been no loud voices lately.
Where are all the analysts now? They ought to be reiterating (shouting) their strong buys and $200 price targets with studied analysis.
Today is the end of 2/3 of the first quarter and Intel continues to be constrained only by capacity. What an enviable position to be in! Let's see...if they earned 1.9B in 4Q96 and have zero growth (HIGHLY UNLIKELY) then they'ver already earned another 1.3B. And did anybody bother to add up all the money they gave to their employees as bonuses in terms of eps that they go down to eps but was expensed? What would eps have been without those expenses, which, by the way, probably aren't going to occur in 1Q97? If Alan Greenspan is worried about overvaluated equities, I'm certain that I wouldn't classify Intel as one of them.
For all you AMD/CYRX lovers, I have little or no concern about whatever they might be able to accomplish. I wish you luck with your investments. They are only minor players in this game and will stay that way. They don't have the resources or the time to catch up. They have a niche and that's what it will stay - a niche.
Still Bullish Barry |
