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

To: Greg Cervelli who wrote (4208)	11/20/1997 5:08:00 PM
From: Sam	Respond to of 7841

Thanks, Greg. Good luck, Sam <eom>

To: Greg Cervelli who wrote (4208)	11/20/1997 5:27:00 PM
From: Bald Eagle	Respond to of 7841

<<Very scarey. I will sell in the morning>> Not up to me to advise you what to do, but I didn't see anything in your report that was worse than what was announced on CNBC yesterday morning ( at least, that was when I saw it ). I'm in so deep on this one that I am now a long term long, I can't see myself selling and losing 40% or more of my investment. Disk drives are not going out of style, when demand catches up with supply, the DD makers will be very profitable again and their stock price will rise accordingly. It may be 98 or it may not be until 99, but I'm sure it will happen this century. Good luck.

To: Greg Cervelli who wrote (4208)	11/20/1997 5:35:00 PM
From: mattie	Respond to of 7841

Good report Gregg. Thanks for taking the time. I sold today for a tax loss as well. I looked past the earnings projections to the price to book ratio. Seagate has traded down to book value quite a bit over the past 6 years. Book value is now at 14 and change. Couple that with the lowered earnings and it is very possible we will see the mid teens soon. I will look to buy some at that range in early 1998.

To: Greg Cervelli who wrote (4208)	11/20/1997 5:56:00 PM
From: Gus	Respond to of 7841

Thanks, Greg, When asked what was more important, Market share or Margins, the answer was market share. He said they will continue to cut prices and will not lose any more market share. That line in the sand just about sums it up for the industry for the next few quarters. Nobody's desktop or enterprise drive business is safe. The disk drive makers have lots of cash in the till so they can weather the storm better than the rest of the disk drive supply chain. It usually takes about 2-3 months for the component suppliers to feel the brunt of the compressing margins of the disk drive makers. Conversely, it takes about 2-3 months for the enterprise drive customers like EMC and MTIC to capture the benefits of the falling prices of disk drives, the single largest cost component of those storage products.

To: Greg Cervelli who wrote (4208)	11/20/1997 6:22:00 PM
From: Vanni Resta	Read Replies (1) \| Respond to of 7841

Greg, thanks for the great reporting job, Vanni. EOM

To: Greg Cervelli who wrote (4208)	11/20/1997 8:29:00 PM
From: Greg Cervelli	Read Replies (2) \| Respond to of 7841

Several points of clarity often times it is easy to say things that may not be entirely accurate because it helps make a point. It has been called to my attention that perhaps I have have done this in my report earlier today. I'd like to clarify several of the points I made Paragraph 2) I inferred that they would not be at full capacity due to inventory. This was never stated by the CFO. Paragraph 4) Unrealized losses of 100mil from currency hedging not accounted for last Q will be spread out over several Q's. This again was not stated by the CFO. Rather, that information came from the 10Q in section 12 Paragraph 6) They will see a product from Quinta as early as the end of this fiscal year. Accept my apology for I misunderstood what I was told. Paragraph 8) 250mil in rev from software was a number that I calculated based on the 63mil from last Q. I was never told this, nor was I given a projection. I simply multiplied 63x4= roughly 250. Paragraph 9) At this I assumed that that they would cut prices to regain market share. That was never explicitely stated to me. Rather, I inferred it based on the response that market share was important. This is not to say that that he said margins were not important. Paragraph 12) I did not understand what he was saying about software. I realized I made a mistake when I read that seagate already had a software subsid. I think the point was that software was an important componet of their business. Paragraph 13) Considering the fact that I don't even know seagate's long term strategy, my statement that the investment in Dragon Systems does not fit it was rather unfounded. Dragon has a great technology and they invested in it. I guess since it didn't have a direct link to dd I assumed more than I should have Lastly, he never gave me a direct answer to the EPS question. All he said was that they released a guidance statement on or around Tuesday. I told him that I read an article where a Gruntal analyst lowered estimates from .25 to .11 . He told me he thought the concensus was somewhere around .08. and that .11 was probably too high. He told me they would be "Marginally profitable" I assumed that marginally profitable meant lower than the concensus. Obvisiously to be profitable they have to make some money, so I figured at least .01, and .05 was a good round number. I guess I would have been safer to say between .01-.08. I'm sorry for the confusion. Next time I promise a completely unbiased report I you have any questions regarding these clarifications please let me know. Greg