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Strategies & Market Trends : Steve's Channelling Thread -- Ignore unavailable to you. Want to Upgrade?

To: All Mtn Ski who wrote (28731)	9/25/2001 6:54:55 PM
From: Jdaasoc	Respond to of 30051

Tom: It seems entire PC space is in trouble. I cut this snippet from eopen web site today about IBM having to dump overstocked 20 GB IBM hard drives that Dell is starting to refuse. IBM - 20GB Deskstar 60GXP Hard Drives - DELL P/N - 07N7402 (EXW Dell Hub - Nashville, TN) 07N7402 Date Code: N/A, Manufacturer: IBM, Packaging: Factory Sealed, Condition: New, Seller: IBM These parts were manufactured for DELL and have a proprietary configuration. Please note the configuration information enclosed in this description, for other usage. Note: These Hard Drives are sold in LOT quantity. IBM is offering Desktar 60GXP Hard Drives at e2open.com. These drives are of first quality new manufacture. Please see the Auction Terms and Conditions for further details. The part number and brief description of the drive is listed below: 07N7402- Deskstar 60GXP 20GB Hard Drive

To: All Mtn Ski who wrote (28731)	9/25/2001 11:08:17 PM
From: Zeev Hed	Read Replies (2) \| Respond to of 30051

Tom, we will probably know better tomorrow. MU Book is now around $11, and thus I am lowering my target to 1.5 book or $16.5/share, not too far from the original "forecast" of $19. We may not get there for the simple reason that, IMTO, we have reached right now a major bottom in the market in general, probably, after some early selling tomorrow, we may rally to about $25/$26, and then we may retest later (December?) and even breach $19 (a slump to $16.5?). I am concerned that their inventories are more than 3 months sales. On the other hand, their receivable are only 45 DSO (the $790 MM receivable includes $560 MM of tax refunds, not customers' receivable.). The fact that they invested $1.5 B in capex this year and still are planning to invest $1 B next year, is actually positive, since that helps them keep up with Toshiba and fully convert to .13 microns. Mind you, their capex next year will be smaller than their depreciation next year (which I estimate at at least $1.25 B). The big problem is that they must double their sales to just cover cost of goods, and that is a tough nut to crack unless memory prices increase some in the near future. Contraction of worldwide capacity might be some help there. Zeev