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

To: Mike Stern who wrote (25755)	11/26/1997 2:15:00 PM
From: John Rieman	Read Replies (3) \| Respond to of 50808

Today's weakness is related to UST's cut in ratings form a hold to a sell. Cube's price droped from the low $30s to the low $20s on 3M shorts who covered. More shorts maybe covering today. The first move down was because of Cube's huge exposure to Asia. Almost 50% of Cube's revenue are derived in China. Today's Asian problem can be traced back about 2 years when China devalued it's currency. This gave them a competitive advantage over their neighbors. China is unaffected by today's Asian currency problems. However, there is a risk that China will choose to devalue their currency again, and start todays problem all over again. The real problem with Cube's out-look is that a VCD price war has started again in China. UST may have mentioned this. This is happenning at a good time for Cube, since Qs 4 and 1 are seasonally strong. The result is that instead of a blockbuster Q4 for Cube, it will have a good Q4. Competitors depend on the market. Encoders = IBM VCD = ESST DVD = Toshiba, Chromatic, IBM, and software for PCs from Zoran and MediaMatics Set top boxes = SGS Thomson, LSI There are plenty of others, but these are the majors.