Mile, you know that I am proponent of the point of view that we "lowly investors", are always the last to know what is really happening. Well, sometime last week I took the position that a close below $74 would indicate at least a temporary change in the fundamentals, maybe, the IBM announcement might have been just the news event that we knew not about, but was reflected in the lack of support at $74 and the very consequent heavy selling just above $80 (around the same level where the first thrust was stopped two weeks ago).
Now the question is, if true, how significant is this announcement, the announcement included some statements indicating that RDRAM does not have advantages relative to the "competing" memory schemes coming up. Is there a possibility that others will follow in IBM's steps? How many defections can we expect? In any event, as long as INTC supports RDRAM, the long term story does not change, IMHO, but the rate of market penetration might be affected. Thus whatever we face in the next three weeks in terms of FUD, short raids and announced defections, I still think that the actual RDRAM driven PC that are going to ship late in Autumn will be sufficient to change the balance of FUD and HOPE to the HOPE side, and thus my year end target of having seen $122, still holds. In between, the $69 level is still pivotal, IMHO, and if it does not hold, I would hold some powder dry for acquisitions in the low $50 and maybe even in the $40. Remember, when RMBS, one of the more manic depressive stocks around, gets into one of its depressive moods, the price can be shaved by more than $20 in just two or three weeks.
Zeev |
