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Technology Stocks : Broadcom (BRCM) -- Ignore unavailable to you. Want to Upgrade?

To: chojiro who wrote (6065)	9/6/2001 4:11:29 PM
From: ed schilf	Respond to of 6531

Looks like it's getting a little harder to short this thing.

To: chojiro who wrote (6065)	9/10/2001 12:18:06 PM
From: Stoctrash	Read Replies (1) \| Respond to of 6531

From Barron's: interactive.wsj.com Q: Speaking of chips, what's your take on Broadcom? Wick: It strikes me that a lot of the businesses that Broadcom has a strong position in are not healthy. The digital set top box market looks like it has plateaued. The average selling price for integrated circuits going into cable modems has dropped substantially over the last year -- they've gone from in the neighborhood of $35 to $25 or less. So I think Broadcom has been under a lot of pressure there. Certainly the trends in the local-area-networking market are not beneficial. A lot of corporations in the United States and Europe are at the point where they don't need to spend a whole lot of additional money on their networks. And given that Broadcom is a big supplier to companies like Cisco and 3Com, I don't think that is a particularly positive trend. This is a company with gross profit margins that have dipped to -- I think they were 46% in the last quarter, down from 58% a year earlier. The company is going to lose money for the next three, four or five quarters at least. And the market value of this company is still close to $9 billion. And they are at a revenue run rate, I think, in the neighborhood of less than $1 billion. So this looks very expensive for a company whose pricing is under pressure and whose gross-profit margins are sinking. And, by the way, their customers don't particularly like the company. Broadcom has a reputation for arrogance that is second to none in the industry. So when customers can stick it to them, they will.