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.

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

To: hueyone who wrote (38264)	1/22/2001 12:37:18 PM
From: Sunny	Read Replies (1) \| Respond to of 54805

hueyone, thanks for the information. You certainly told me things I didn't know. I have not looked at SSTI close enough to know whether I want to sell something to buy it, but I will start that DD now. Sunny

To: hueyone who wrote (38264)	1/22/2001 1:52:03 PM
From: EnricoPalazzo	Read Replies (1) \| Respond to of 54805

Thanks, huey. I didn't respond because I knew you could do a better job than I. Looks like I was right! ;) I only have a dim recollection of the legal issues (I've only just begun my DD on SSTI), but what huey said sounds right. I should note, though, that in reading their latest 10-Q, one thing that jumped out at me was the numerous risks they take on by outsourcing their manufacturing. Things like: being at the mercy of the manufacturing partners not to screw up/screw them; the possibility of manufacturing partners stealing their IP, etc. I don't yet understand the cash flow dynamics of outsourcing manufacturing--do they pay for memory only upon receipt? If so, this would seem to provide for a comparatively light business model, and insulate them somewhat from industry cycles. Also, I may be wrong, but I imagine that memory manufacturing requires a lot of scale, which would explain why SSTI can't manufacture their own memory (yet). However, SSTI has noted that they may need to make significant cash investments in foundries in the future to ensure supply. So maybe the business model isn't so light after all... Also, the 10-Q notes that memory is a rapidly changing industry, with rapidly changing architectures (over which SSTI has little control). They play in many different industries (PC, wireless, networking equipment, etc.) Obviously, SSTI can't become a Gorilla, but can a company be a King if there isn't a single, stable proprietary architecture? If someone who knows the manual could clear that up, I'd appreciate it. One more thing--while everything I've seen has led me to believe that Bing Yeh (CEO) is sharp as a whip and a real stand-up guy, their dependence on him is a risk. He's apparently the brains behind much of their design. At the same time, the Inc. article about their IPO (linked from their investor relations site) notes that he enthusiastically delegated responsibility to his CFO, respecting his domain expertise. i.e. he doesn't seem to be a control freak, and can presumably build an effective corporate culture. e