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.

Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: KMcKlendin who wrote (20734)	6/29/2001 4:07:15 PM
From: Jacob Snyder	Respond to of 24042

Thanks for the reply. You are right, that the decrease in stock price eventually compensates for the dilution from failed acquisitions. By paying in stock, JDSU (and other techs) insured that they will be able to survive this downturn, as the damage falls entirely on stockholders who bought and held at higher levels. OTOH, companies (like so many telecoms) who piled up debt in the go-go days, are now facing liquidation. OK, so they come out of this downturn dominating a growth niche, and not too badly hurt (the company, not the shareholders). But, they have to find a different business plan, a different way to run the company, in order to do well going forward. That's because their previous methods, in the 1995-2000 period, were heavily dependant on acquisitions. Think about all the things they bought through acquisitions. Basically, that's how they built the company, and paid many of their costs. And that isn't going to work any more, unless the Bubble gets re-inflated. So, going forward, they have to develop new products, enter new markets, retain and hire employees, etc., etc., and they have to do this the old-fashioned way, internally. Can they do this? I think it's going to take a while before it's clear whether they can make the necessary changes. Many companies are in this situation now. Some will succeed, some won't. It's too early to tell, IMO. I'm also watching CSCO, to see if they can make the same transition. I haven't taken a position in them, yet, either. The companies who I am beginning to buy, are those who don't need to find a new business model, because they haven't been operating on an untenable business model during the bubble. EMC at 28, TXN at 30. I'm also buying NTAP at 13 and below, and WCOM at 15 and below, because I think the bad news is in those stocks now. Still trying to decide about JDSU. I've made several posts in recent days about P/S, book value, etc. Ignore all my OT ranting posts. See: Message 16008062 , and Message 15998403 Comments?