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Technology Stocks : Deswell Industries (DSWL) -- Ignore unavailable to you. Want to Upgrade?

To: kolo55 who wrote (254)	11/19/1997 10:37:00 AM
From: CPC	Respond to of 1418

Paul, >1. Recent insider sales has buyers sitting on the sidelines. Even though the volumes were small, and at higher prices than the stock trades currently, these sales unnerved investors, especially given what just happened with Nam Tai. There insider selling presaged a 50-60% decline in the stock price.< When does the insider sale occur ? The recent melt down in HK stock market may be causing a cash crunch for many people there. C.P.

To: kolo55 who wrote (254)	11/19/1997 10:47:00 PM
From: Ron Bower	Read Replies (1) \| Respond to of 1418

Paul, Weakness in price - all you have to do is watch any financial news TV show or read a column and the average investor would wonder why he owned a stock like Deswell. He sees the DOW and other indicators moving up and DSWLF losing, so he bails out to get into something that will move up. Makes sense if you don't follow the company. Also - funds have made good money to this point and have pulled out of the market to lock those profits in. They will not return to the market until after the year reports are issued. This is the reason for the very light market trading. Warrants - Why would they convert? Have plenty of cash. If they call the warrants, they dilute the dividends. It's a $4.5M reserve they can call at anytime, but at this point that amount would mean very little. I don't believe they will call unless they get in a cash bind and that's not in the near future. However, at these prices I too would chose stock. Competition - With all of the major companies investing in China, I believe the opportunities exceed risk of competition. Deswell is there, they have ample funds, and are in a position to take advantage of the China growth. One of their problems has been proximity to customers and the customers are now moving to them. Currency - Deswell has been selling to the US, Germany, Japan, HK, and others, dealing in many currency conversions, selling products based on $US. A decline in $HK or Yuan would have little impact on revs and earnings and, unlike the problem with most Asian companies, have minimal impact on assets as they lease their properties. Ardor is a good description of my feelings towards Deswell. Far better than 'irrational exuberance' because I see nothing irrational about my decision to go heavily into Deswell. We'll find out in February when the next report comes out in a bull market. For what it's worth, Ron

To: kolo55 who wrote (254)	11/24/1997 2:37:00 PM
From: Ron Bower	Read Replies (1) \| Respond to of 1418

Paul, I spent some time trying to determine the extent of competition for plastics extrusion in China. There seems to be many companies in plastic products, but each has it's own market niche and I found none in direct competition with Deswell. The closest I came was a US based company with HK offices and a factory in China that has telephone cases listed as one of it's products and some electronic assembly. None into the combination of plastics, metal stamping, circuit board, and assembly or into Deswell's product mix. At this point, I get the impression they are all doing well in their own areas and competition between companies on specific products to be a future problem. Success will obviously depend on management and financial resources, strong assets for Deswell. However, there is competition in Taiwan and some other countries. A expected, price getting pounded because of problems in Japan. Another test of patience and wisdom. Today, warrants seem cheaper. For what it's worth, Ron