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Technology Stocks : Wind River going up, up, up! -- Ignore unavailable to you. Want to Upgrade?

To: Ramsey Su who wrote (5483)	6/16/1999 11:20:00 AM
From: Peter Church	Read Replies (1) \| Respond to of 10309

Hi Ramsey, Here is a great post from Allen regarding both INTS and MSFT: exchange2000.com I do think that WRS's closest competitor is worth watching, especially as a marker for WRS's progress and the industry as a whole. I don't think that WRS's management has ever downplayed the MSFT threat. They always said that they were watching carefully, but that MSFT has not had an impact on their sales. Apparently, MSFT is operating in a mostly different arena and has lots of heavy baggage to carry around with it. Not that they won't be a direct competitor, especially with WRS moving onto Msft's turf. I just think management has been straight about how things look on the ground. And MSFT is just not there, yet. (See posts 4381, 4382 for highlights of the last conference call and comments about MSFT.) I also think that the downgrade of WIND due the uncertainty of succession for Ron's job is the main problem with the stock right now. That and the slow down in earnings last quarter. Looking at Everen Security's downgrade announcement from 4/23/99, they dropped their price target by 50% for that reason alone. BTW, their 3/1/99 upgrade made little to do about MSFT and more about INTS re-emerging as a legitimate competitor. The report is worth reading. Everen has a good grasp of the RTOS market players and WIND. These problems should be resolved shortly, and the investors who saw the future in WRS will be rewarded well. "The secret to amassing great wealth is to identify the new economy's biggest winners while their stocks are still relatively cheap." Forbes

To: Ramsey Su who wrote (5483)	6/16/1999 12:47:00 PM
From: peter grossman	Read Replies (1) \| Respond to of 10309

"They need to have 3 digit growth for a couple of years." I'm curious how you see this as possible. Please convince me! WIND has just lowered Tornado II's price. Whereas the unit volumes for some royalty generating possibilities are potentially enormous, this will contribute handsomely to the bottom line. Even the potential we can now see (cable modems, digital cameras, I2O, set top boxes) will not be fully realized for several years. Do you see triple digit growth for Tornado II as possible? Professional services? Revenue growth for the industry is pegged at about 35%, a far cry from 100+ %. I'd be quite happy with consistent 40% revenue growth from product sales. Because royalties are increasing as a percentage of sales, the net will improve more dramatically, especially if I2O starts to kick in in a meaningful way. Service revenue may increase faster than product revenue because of the vertical professional service solutions model, but those revenues won't carry nearly the same margins. I believe that until this last quarter, with several PR disasters, WIND had let its performance do the talking. I liked this approach, but it relied on absolute consistency. In fact, they did come through every time until last quarter. As soon as they missed, the punishment was immediate and severe. I think that they've learned a lesson. They need to manage expectations and perceptions as well as numbers. I think that their PR will be a bit more proactive (witness internet talk), and their new CEO will consider the stock a valuable currency. Of course, in any case, there must be a return to reliable performance. Can't cancel conferences, etc.