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

To: michael i olson who wrote (5856)	8/22/1999 10:18:00 AM
From: Ram Seetharaman	Read Replies (2) \| Respond to of 9582

From late 1994 till about Sept. of 1995, ALSC experienced tremendous price action from $ 7+ to ~ $ 48+, due to chip shortage. It also split during that period! From then on (except a short rise to about $ 15 in 1997) it was a long slide to the $ 2 low of Oct. 1998. It was the nadir for ALSC. But unlike the previous cycle, ALSC got some great news due to the UMC and BRCM deals that bodes well for the long term health of ALSC and a higher book value of ~ $ 21! Based on the new July book to bill ratio of 1.11 for equipment manufacturers ( which was worse than the 1.21 number for June 1999!), we are not ramping up like the 1994-1995 times - and there is a lull in order acceleration. Year 2000 has been seen as a better year. However the shortage may not be as acute as 1995 and the competition is more in 2000! Thus we may not see that kind of price action ( $ 7+ to $ 48), since ALSC is not the bellwether chip stock. It is probably INTC, that is the bellwether! But in all cycles ALSC did reach the book value and probably went beyond it too! So IMHO $ 21 is easy to achieve - but $ 40+ may be achieved only by seeing acute shortage. The other negatives for ALSC management include lack of sales and marketing savvy to push it to new highs. ALSC is technically okay, but not the best in planning, sales and marketing due to their size and modus operandi. However I think they are making shrewd decisions in not going after business that lose money or that might burn them. They want to do deals like the Maverick networks. It all makes sense from a money management perspective. But market will not like it, if they don't deliver sales and results in their core chip making business, and that might become the most significant issue for price action from $ 21+ (book value) to higher highs!