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Technology Stocks : Son of SAN - Storage Networking Technologies -- Ignore unavailable to you. Want to Upgrade?

To: w2j2 who wrote (4513)	4/8/2002 11:28:19 AM
From: jad	Respond to of 4808

More on the same from Briefing this morning: Brocade Comms (BRCD) 24.99 -1.92: A not-so-flattering piece in Barron's Technology Trader column is weighing on the stock today. Storage network rivals are going after each other pretty aggressively, which is not good news for the space generally. McData (MCDT 9.29 -0.38) recently warned for the second time in a month. as weak spending at data centers has pinched orders. In the switch market, 2-Gbps is the emerging standard as Brocade has recently begun rolling out its SilkWorm 12000 switch. McData expects to be selling new 2-Gbps switches in Q2. The problem is that Brocade is pricing its 2-Gbps switch at only a small premium to McData's current switch, even though the Brocade switch runs at twice the speed. Briefing.com is not sure whether Brocade is doing this to capture market share or if it's all the market will bear. It's not a good sign either way. Another concern with Brocade is that long-time Brocade bear Piper Jaffray analyst Ashok Kumar cites a few large data centers telling him that their Brocade SilkWorm 12000s arrived with warnings from Brocade against them until Brocade announces the SilkWorm's "general availability." The problem here is whether Brocade has counted those shipments as revenue? Investors should know that the financial statements (balance sheet, income statement, statement of cash flows) are interconnected. When a product is sold, the sale hits the income statement at inventories are reduced and accounts receivable are increased which also affects the cash flow statement. The concern here is that Brocade shipped the product, but if told not to use it, are these test products? Do they really qualify as revenue? This may be the normal operating procedure in the networking space, but it's a question that needs to be put to the company.-- Robert J. Reid, Briefing.com