Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: Stoctrash who wrote (43200)	7/19/1999 5:06:00 PM
From: Nevin S.	Read Replies (1) \| Respond to of 50808

From CSFB: C-Cube Microsystems (CUBE-$35 7/16-Cap$1.4B-Buy)Charlie Glavin CUBE reports in-line; Raising PT to $40 FY99: $1.26 (from $1.27 (rounding)); FY00: $1.45 * CUBE reported in-line with our 2Q98 $0.28 est, given the strength of DiviCom and STB segments. Momentum at both these segments helped to offset the anticipated decline in the VCDmkt. * GM came in at 55.5% (vs. 54.5% in 1Q99) due to mix shift toward higher margin segments. DiviCom rev represented nearly 50% of total rev, growing 22% Q/Q. * Going forward, we expect that the slower seasonal pattern historically witnessed in 2Q will be mitigated as DiviCom and the STB business continue to grow as a % of rev and as increased DVD sales take off, displacing the more volatile VCDmkt. * We modified our 1999 EPS estimates slightly - rounding down a penny for 1999 to $1.26. EPS for 2000 remains $1.45. Based on a more stable semi business and strong DiviCom support, CUBE deserves a slightly higher multiple of 25-30x and an increased price target of $40.

To: Stoctrash who wrote (43200)	7/19/1999 5:20:00 PM
From: Black-Scholes	Read Replies (1) \| Respond to of 50808

And it's about time CUBE management does something with the $240 million in cash on the balance sheet. BRCM is out making acquisitions (yes, I know it's easier because of their flakeball valuation) so CUBE better do something too. Maybe, Don Dorsey is right: CUBE's volatility can be attributed to the typical CUBE investor having high growth expectations and then when CUBE reports solid (but not great) earnings and modest growth, a certain percentage of the shareholders are dissappointed and dump the stock. Maybe CUBE management just plain does not see the need for the high-octane growth that we all expect?