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Technology Stocks : Alliance Semiconductor -- Ignore unavailable to you. Want to Upgrade?

To: Ram Seetharaman who wrote (5462)	7/22/1999 9:58:00 PM
From: Harlan Huber	Read Replies (2) \| Respond to of 9582

Some Comments ... Regarding Semiconductor conference, this will be held on July 28-29 at the Ritz Carleton in San Francisco hosted by BancBoston Robertson Stephens. According to their advertisement, more than 100 of the industry's premier private and public semiconductor companies will be represented by either the CEOs or CFOs. I don't know if Alliance will be attending or not, but I would certainly think so. Can anyone confirm this? I have Level 2 quotes (doesn't everyone just about now a days), and I saw a lot of institutional buying over the past week, but also a little institutional selling the last two days. In particular, someone sold a block of 108,000 shares at 10 1/8 after the market close yesterday, I believe. On a net basis, I saw more institutional buying than selling, ie, the selling was primarily by small investors taking their profits, or just bailing out. Also, through the usual technical jargon, the company's stock is quickly becoming oversold based on the stochastics, Williams %R, you know, the usual technical jumbo-mumbo. One interesting thing was that Hambrecht & Quist (H&Q) has been on the buy side frequently the last week, buying a lot at 9 11/16 the last two days. I would think that H&Q customers would only buy on the recommendation of the H&Q brokers, ie, their research department, and I would think that H&Q would be on the correct side. I hope so, otherwise my confidence in H&Q has been shaken. I wonder if H&Q will initiate coverage of the company with a buy rating, since next quarter looks much better than this one. If Alliance attends this conference, I would hope they would spell out their business model for the future. If they can't make money in semiconductors, what are they doing in the business? Perhaps as someone suggested on this board, they should become a closed-end technology fund, because their investments have done spectacularly. I wonder how Wall Street will evaluate this company and what kind of PE they will assign to them. After all, they are making a lot more money than most lillle semiconductor companies out there, only it is not from operations. But money is still money, regardless how it is made, as long as it is legitimate, of course. I don't see how they will ever make much money in the semiconductor business the way they are currently going. So what can they do ... make some acquisitions, buy back stock, get out of DRAM business and concentrate on the chips for telecommunications and networking? If they sell much lower, aren't they an outstanding buyout candidate, say someone offering their stock as currency to get at the company's current and future cash? Does anyone have any idea what the future business niche of this company can be if they are ever going to generate significant income from their operations. Harlan

To: Ram Seetharaman who wrote (5462)	7/22/1999 10:00:00 PM
From: Charles R	Respond to of 9582

Ram, OK, let's agree that ALSC management made good investment choices. Does that mean one should not care for the operations side? How should that be shored up? Forget the lack of profits for the last Q, I am baffled by the huge inventory position in spite of what came up with the press release. How can a company with $17M revenues this quarter see a $14M+ increase in inventory in just one quarter? Anyone care to explain? Chuck

To: Ram Seetharaman who wrote (5462)	7/23/1999 1:02:00 AM
From: Don Lloyd	Respond to of 9582

Ram - (...ALSC won't be able to match the 30+ % profit margins of the Chip leaders like LLTC, because it will take them years to set up shop, neither should they try to mimic companies like Micron (pre-tax profit margin of 5 %) by doing business in huge volume to generate paltry profits...) Your reasoning seems sound, but as an aside, it may often be as misleading to try to group chip companies as it would be to group companies with red brick headquarters buildings. For example, LLTC doesn't achieve its 74% gross margins, etc., simply because it's a chip company, but rather because it uses its scarce analog engineering expertise to supply valuable solutions to significant customer problems. The actual chips can be considered as encrypted problem solution packages, not easily duplicated since both the designed circuitry and the specialized in-house fab processing are necessary to meet the analog performance requirements in the markets addressed. Regards, Don