Disk Drive Sector Discussion Forum Message Board

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Technology Stocks : Disk Drive Sector Discussion Forum

WDC 152.88

-5.9%

Nov 18 3:59 PM EST

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To: Z Analyzer who wrote (6149)	4/27/1999 7:42:00 PM
From: Frodo Baxter	Read Replies (3) of 9256

I think you ought to be a lot more skeptical about Hutch. If it wasn't for their recent equity offering, they would hardly be in much better position than the rest of the HD junk food chain. Yes, they have first mover advantage, which they bought for a couple hundred million dollars in negative free cash flow. The jury is still out on whether that's a wise investment. You construct this scenario about demand fall-off caused by quarter end inventory management by the drive builders. I find this theory just weird. Yes it happens; balance sheet management happens every quarter. How can you possibly ignore all the warning signs about accelerating areal density, more low-end units, fewer components, emanating from EVERY company in this business? This year, there will probably NEGATIVE unit growth in heads, plates, and suspenders. Doesn't that scare you? It scares the heck out of me.

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