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

To: Maya who wrote (45210)	9/23/1999 12:19:00 PM
From: BillyG	Respond to of 50808

CD-ROM market slowing......... Taiwan's CD-ROM Drive Makers See Low Growth in Aug. Shipments September 23, 1999 (TAIPEI) -- Taiwan's overall CD-ROM drive shipments in August posted only slight growth from July. Local manufacturers say this was due to a limited supply of upstream materials and because demand was not as high as expected. Lite-On IT Corp., however, attracted attention by reporting a monthly output of 1.14 million units. Thanks to OEM orders from several international PC makers, the company enjoyed an increase of more than 60 percent on a month-on-month basis. In addition, as Lite-On IT announced NT$1.17 billion in net operating revenues for August, it is estimated that it sold each CD-ROM drive at around US$32. That's much higher than the level of US$26 seen during the first half of the year. Acer Peripherals Inc., another local maker of CD-ROM drives targeting OEM manufacturing, saw its August shipments grow by more than 100,000 units from July, marking the highest monthly level so far this year. Acer said that although the CD-ROM market managed to sustain growth amid the trends toward low-cost computers, the limited supply of upstream materials is likely to slow CD-ROM makers' moves to expand operations. Delta Electronics Inc. pointed out that beginning in the second half of this year, CD-ROM drive makers increased production while upstream component supplies remained at the same levels, thus causing an increase in component prices. Afreey Inc. added that components for various optical disk players have risen by an average of 5 percent to 10 percent since August. Local CD-ROM makers said they previously expected that the traditional peak season would arrive in the third and fourth quarters and most of them had planned to beef up production beginning in August. However, demand later proved to be smaller than expected. Meanwhile, the CD-RW and DVD-ROM markets have been booming. (Commercial Times, Taiwan)

To: Maya who wrote (45210)	9/23/1999 12:29:00 PM
From: Black-Scholes	Read Replies (2) \| Respond to of 50808

Let's review how irrational the market is behaving - shall we? About three weeks ago (CUBE: then ~$34), Divicom announced their new revolutionary encoder. One week later, CUBE announced a design win with JVC. DiViT immediately inferred that SONY and PHILLIPS and EVERY CE manufacturer must be buying CUBE's codec. Then the market came to the correct conclusion that CUBE is THE ONLY COMPANY WITH A CODEC THAT WORKS!!!! From $34 we went to $41. A fair increase in firm value considering the new revenue streams. UST raised their target price to $53 and H.C. Wainwright (the only brokerage house that has explicitly expressed a real understanding of the value of Divicom) raised their target to $73. Now, because of a one to two week shut-down of production at ONE (not the only one) of CUBE's foundries, the market "taketh away" the firm value increase from NEW long-term cash-flows? IRRATIONAL!!! Please say something CUBE management.