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Technology Stocks : Storage Technology- STK

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To: Donald Isenhower who wrote (517)	5/22/1999 7:26:00 AM
From: m33806	Read Replies (1) of 560

Hardware sales build the installed base from which service revenues and software sales come from. If hardware sales begin to slip, it spells problems for future service and software business. The inventory position makes me nervous because of the rapid change in high tech business. The more days supply on hand, the bigger the chance of some portion if that inventory becoming obsolete. This is the highist ratio of inventory to cost of hardware sales the company has had in a very long time. As for the accounts receivable being so high, it makes me wonder what the company is doing to obtain business. Are they giving away the store? It sure looks like the stock is at or near bottom unless we get a suprise. At the same time, deterioating margins, a fall off in hardware sales and the condition of the balance sheet offer the potential for big and nasty suprises. The company needs to fix a lot of things. If they do, we can go back to $40. The question remains can they fix it and how long will it take, and how much pain will we suffer while surgery is performed?

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