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To: Andrew Vance who wrote (9479)11/7/1997 12:43:00 PM
From: Andrew Vance  Read Replies (1) | Respond to of 17305
 
*AV*--Sorry for the previous post of haste but I wanted to be as real time as possible. I have added 5K shares of 23.5 WDC to my portfolio along with DEC 25 ($2)and APR 25 CALLS($4).

Rationale- WDC will not go bankrupt and therefore will recover. WDC already got its haircut when SEG reported and news hit about price pressures due to SEG dumping low end drives. WDC was downgraded by Bear Stearns today, WDC says there will be continued price pressures, and earnings will not be as forecasted. A triple threat in print which sent the Money/Mutual Managers on a selling spree all at once. Another over reaction. WDC just barely released two new hot products (6 and 9 Gig drives) for the Holiday season. With "price pressures" you will see more hard drives upgraded for the Holiday season. The expression, "Making it up in volume" may come to play here. Margin %s might suffer but actual $$ earnings may look good next 1-2 quarters. WDC is a premier Disk Drive company and WILL recover. Timing is the only factor here which makes this somewhat of a conservative investment for me since I am willing to wait.

Bottom Line: there may be more downside and maybe I am in too soon (Duh Duh if anyone doesn't know me by now) but I will prevail over the long haul at these attractive prices.

Nothing was done with the 2 portfolios yesterday worthy of additional notation. I exited some options and bought back the same ones today and will consider it a net transaction.

Andrew



To: Andrew Vance who wrote (9479)11/7/1997 6:17:00 PM
From: Mark Adams  Respond to of 17305
 
I picked up a few Jan 30 Calls, thinking WDC was taking the brunt of the overall downturn. While I should have checked the news before making my uninformed buy, I'm still comfortable with it. I've been looking to take a stake here, and had considered $30 as a potential buy price prior to the news. I'll probably beef up the play if events unfold further during the next 6 weeks.


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