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Technology Stocks : EMC How high can it go? -- Ignore unavailable to you. Want to Upgrade?

To: pirate_200 who wrote (12116)	2/11/2001 6:54:08 PM
From: Gus	Respond to of 17183

Also: you completely ignored the quote, from EMC management, that they had the same problem. I'm not parotting anything, I'm presenting a balanced argument, unlike your slanted argument... Now you're resorting to lying. LOL Balanced argument, eh? This is an excerpt from the Barron's article that you seem intent on ignoring. .....One of the biggest rumors of the week was that EMC was "below plan," which is Wall Street code for "deep trouble." The speculation reached such a fevered pitch that *an EMC spokesperson at the conference denied the rumor, explaining that the company's sales performance was adhering to previous patterns and going according to plan.....* ....."People are listening to what they want to hear, [but] we haven't adjusted our tune whatsoever," she said. "When you hear about people doing channel checks, it is hard for them to do that" with a global company like EMC, where "not one customer accounts for as much as 1% of our revenues," Pearson said. "An analyst can call 50 customers and still not get an accurate picture," she said. What's more, EMC has bent over backward to be conservative with its earnings guidance and has tried not to set the bar too high, Pearson said. "Nothing is a lay-up. We have to execute, but we are still small relative to the market opportunity before us. There is a lot of headroom," Pearson explained.....

To: pirate_200 who wrote (12116)	2/11/2001 7:10:05 PM
From: Gus	Read Replies (1) \| Respond to of 17183

The accounts receivable/DSO fluctuation occurs depending on geographic makeup of sales - whether it skews to US or outside US and also segment makeup of sales - enterprise or smaller Now you're just parroting company propaganda and avoiding the issue. Let me simplify it for you so you won't get confused: 1) Receivables have grown faster than Sales each of the last 3 quarters. That is an early warning indicator that could mean many things with the worst case scenario involving customers who have a hard time paying their bills and who could potentially trigger some major write-offs down the road. I happen to think the trend suggests that NTAP is sweetening the terms of its deals due to increased competition. Book-to-Bill has limited significance because NTAP has a high turnover business model. Gross Margins can quickly erode if NTAP has to write off bad receivables. 2) 40% of NTAP's revenues come from dotcoms who were doubling their storage requirements every 90 days. Again, Cisco indicated that its dotcom sales were at 50% of last year's levels and at 33% of its internal forecast for this year. Do you think NTAP is faring any better? The typical business plan for these dotcoms involve cash-burn for the first 3-5 years. With the equity market closed to these dotcoms, they now have to jack up sales more quickly and manage their expenses more stringently especially since the VCs have indicated that losing business models will not be supported for long. The reduction or total disappearance of the repeat business from these dotcoms could be hazardous to NTAP's financial health since it doesn't yet have the enterprise customer base to pick up the slack. 3) NTAP's NAS business is growing slower than the market while EMC's NAS business is growing faster than the market yet NTAP claims that there is no competition. 4) NTAP is a broken-down momentum stock with a loyal sell-side following but slowing sales and ballooning receivables. Connect the dots and you have a trader on your hands.

To: pirate_200 who wrote (12116)	2/11/2001 7:37:50 PM
From: Gus	Read Replies (1) \| Respond to of 17183

It's amazing to me that you are excited about EMC dropping margin on products as the only way to be able to sell them.... Do the math. At $8.87B in 2000 sales, EMC obviously purchases more components than NTAP and gets cheaper components. With EMC Software at $1.44B in 2000 sales, EMC can also push more software behind its hardware. Those software products carry 90% gross margins. Keep in mind that at $210M, NAS represent less than 3% of EMC's overall sales of $2.6B in 4Q2000. The fact of the matter is that EMC eventually surpasses NTAP in unit shipments simply by selling to its installed base of 45,000+ Symmetrix units and 30,000-40,000 Clariion units. Start getting used to it. Like a NTAP zealot, I'm sure that you're going to insist that NTAP's technology is so superior to EMC's technology that EMC will never be able to catch up. The numbers, however, tell otherwise. For instance, NTAP sold 600 units of the F840 over 90 days while EMC sold 250 units of the IP4700 over 25 days. In case you haven't noticed, EMC upped the ante and improved the value proposition of the IP4700 during this quarter by releasing the FC4700 which can be converted into an IP4700 with the simple change of software and an interface card. Again, the pointed question for you before you get lost in the technical minutiae is why NTAP growing slower than the overall NAS market while EMC is growing faster than the overall NAS market. Ponder on that for a while before you launch another series of tiresome emotional arguments.