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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: chaz who wrote (4258)	7/24/1999 5:22:00 PM
From: Apollo	Read Replies (2) \| Respond to of 54805

Given that INTC is going to go that way, where in the TALC does that put Rambus....over the chasm, across, or in the tornado? Chaz: I posted this a few days ago.... I read Geoffrey Moore's brief interview in the S.J. Mercury News earlier this week, and am reminded that the tornado requires 100% growth year over year, but that a company must first "cross the chasm" before getting widespread adoption. Therefore, it would seem that Rambus is presently crossing the Chasm, since the memory manufacturers have nearly all licensed their architecture, and many are right now producing the chips, but none of the Rambus chips have found their way into new products just yet (presently used in Nintendo's video game). The new products on the horizon are confirmed for Sony Playstation II and Dell workstations. Unconfirmed but widely expected are all high end computers. Speculated based on bits and pieces of news, with plenty of inference, are high-end printers, DVD, HDTV, networking equipment. See rambus.com So by definition, Rambus is not yet a Gorilla, and is not a buy by the classic Gorilla Game rules because it has not yet completely crossed the chasm and cannot yet be in a tornado, which should appear on earnings announcements in Y2K. I think the chasm is almost crossed now and will have been completely crossed by this Autumn/early Winter when Intel releases Carmel/Camino chipsets AND many OEMs have released product with RAMBUS in it. Stan PS- What is TALC

To: chaz who wrote (4258)	7/24/1999 5:46:00 PM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

I've had a chance to look at the Siebel Systems earnings report that prompts a few observations. Balance Sheet: Cash and short-term investements increased $5 million to more than $156 million. Not having access to the cash flow statement until the SEC filing appears, I don't know what cash flow from operations looks like. Now that USinternetworking, an ASP that offers Siebel 99, is a publicly held company, Siebel is showing the value of that investment at an additional $62 million. Accounts receivable has come down as a percentage of revenue. That's good and has been a point that apparently some analysts might have been concerned about. Working capital is about $373 million and the current ratio is about 3.0. No problem there. Retained earnings and stockholders equity continues to grow dramatically. Income Statement Okay, now the stuff that gorilla-gamers like to peruse. Trailing revenue is nearly 50% greater than Vantive's and Clarify's combined. Licensing revenue for Q2 is 115% greater than Vantive's and Clarify's combined. However, Q2 licensing revenue decreased from 75% of the total in Q298 to "only" 67%. Compare that with Vantive and Clarify whose licensing revenue is 46% and 55%, resspectively, of the total. Siebel's Q2 licensing revenue grew 63% year-to-year compared to Vantive's and Clarify's growth of 15% and 46%, respectively. Siebel's sequential growth was 18%, compared to Vantive's and Clarify's growth of 0% (no, that's not a mistake) and 18%, respectively. Summary: It's apparent that Siebel is increasing market share based on the data we have available. Oracle might disagree, but that's for another discussion. Other stuff, though less important to gorilla gamers. R&D continues to fall. It's now down to 10% of revenue. If that's sufficient to stay ahead of the competition in getting superior products and a lead to the market, it's great to be able to do it while decreasing relative costs. But I wouldn't mind if R&D increased. Sales & Marketing as a percentage of revenue fell from 42% to 37% in Q2, year over year. I like the improving economies of scale. As a result of decreasing R&D and Sales & Marketing, operating margins increased from 20% to 24% in Q2, year over year. Similarly, net margins increased from 13% to 15%. Valuation Using the updated 107,690,000 fully diluted shares, the market cap stands at $6.6 billion. Only $3.4 billion to go before we qualify for Uncle Frank's G&K index. We'll be submitting our application sometime next year. :) Using current estimates for FY2000, the trailing PE (excluding one-time charges) is just a tad shy of three times the expected growth rate. That's nose-bleed territory considering Siebel's history. It will come down somewhat if (I should say, "when") analysts raise their estimates. Comments anyone? --Mike Buckley