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Technology Stocks : Smart Modular - diamond in the rough?
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To: michael modeme who wrote (1946)4/21/1999 4:07:00 AM
From: Mark Peterson CPA  Read Replies (2) of 2020
 
SMOD's growth is connected to CPQ's revenues, not their earnings.

Michael, while the first part of that statement is true, IMO, I'm not convinced you have the second part correct. A company like CPQ has enormous leverage over the vendors it partners with. I am absolutely certain that CPQ will squeeze SMOD and other vendors to lower their costs using the implied threat that we'll take our business elsewhere if you're uncooperative.

That's writing on the wall for SMOD IMO, and it will stay like that until the "new" CPQ team is satisfied that the market has validated their business plan, whatever it may be. But I see this validation taking substantially longer than a single business quarter and that's why in the short term, SMOD is dead money.

Best regards,

Mark A. Peterson
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