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Technology Stocks : Seagate Technology -- Ignore unavailable to you. Want to Upgrade?

To: stock bull who wrote (4174)	11/19/1997 3:04:00 PM
From: Joe E.	Respond to of 7841

<<Don't panic. As I said a few times before on this thread, SEG should trade in the 17 to 18 dollar area. This is based on valuation and a pe of 15. So, from the current price of around 22, I think the downside risks are now limited.>> news to be expected: We can look forward to management announcing the amount of their restructuring charge, and probably some more news on the currency effects. We can probably look forward to another brilliant (?) purchase in the software area to allow SEG management to continue to be technology leaders rather than just disk drive manufacturers. We can look forward to some laggard analysts revising their earnings forecasts downward for SEG and the other disk drive makers. Can we look forward to some technical innovation from SEG? It would be nice. selling to be expected: Seagate is down for the year, so is a great candidate for some really great tax loss selling in early December. Everyone will need some losses to offset those short term gains. My impression is that the tax selling effect is mostly over by mid December. Negative: Wow, the above was negative. Why am I long?

To: stock bull who wrote (4174)	11/19/1997 6:45:00 PM
From: MKL	Read Replies (2) \| Respond to of 7841

I am new to this thread but know the DD industry fairly well. I just read IDC's report on the market share and it shows why Seagate is having problems. 1Q96 2Q96 3Q96 4Q96 1Q97 2Q97 3Q97 ---- ---- ---- ---- ---- ---- ---- Total 29% 28% 29% 26% 26% 23% 24% High End 53% 54% 58% 56% 54% 45% 45% The high end is where Seagate was making most of its profits. They have now lost 10%! Mostly to WD, QNTM and IBM. Also, Fujitsu is making noise in this segment. At one time, Seagate was the only player in town with volume availability. But all the other players have increased high end offerings and capacity. While Seagate is first to 10,000 RPM, people in the industry doesn't think highly of the drive or there is a very small market for them. The other features are more critical (areal density and channel rate). Also, customers are very interested in reliability because these drives are used in servers and Seagate is not know as the leader in reliability. There was much talk that Seagate dumped desktop drives at the end of 3Q. This is true and they were at the lower capacity points where there are low gross margins. Seagate desktop segment is also in trouble due to bad designs and slow to conversion to MR technology. Their profitable desktop drives were from the Conner acquisitions. Now that they are reaching end of life, Seagate has not demonstrated that their R/D team are capable of design new ones. I don't know if they are spinning their wheels. Seagate had resisted conversion to MR and stuck with inductive heads. While this strategy of milking old technology was profitable in the past, it is now beginning to show its problems in Seagate's bottom line. The learning curve is expensive and it will continue to hurt Seagate in the short run. The other DD companies are further ahead of Seagate in the transition. I hear Seagate is trying to buy as much MR heads as it could from Readrite because of its own internal conversion problems. It would be interesting to see when Seagate will turn it around, but I don't see it in 1998. Happy Investing