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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: Sam who wrote (1665)	12/2/1997 6:14:00 PM
From: Will Cunningham	Respond to of 9256

Sam, Korean companies that make DRAM and HDDs will be cutting back on production in '98 from what I've read. Samsung especially has stated a restructuring plan and has cut 30% off their capital spending plans. They are having trouble finding financing for new fabs. The difficulty in raising money to fuel future growth would seem good eventually for some American commodity PC manufacturers like Texas Instruments, Micron Tech, and the HDD makers. So much money is going to the various IMF bailouts to Asian countries that the available supply of capital on world markets will be tough to get next year. Seagate and Quantum I see in the last six months might have been quite shrewd to have completed their debt offerings while business prospects were seemingly solid. This money can now help to buffer them during a tough environment over the next few months and should aid them to take advantage of weaker market conditions in their industry by making new investments if needed to shore up their positions. Just my take.

To: Sam who wrote (1665)	12/2/1997 7:20:00 PM
From: Z Analyzer	Respond to of 9256

<<but for what it is worth at this point, I think it is getting to be almost as cheap as it was last summer.>> In summer of 1996, I figured that DLT alone might be worth Quantum's full market cap so that the Disk drive business was free ( the transition to MR was still ahead and the high end was a worse disaster than presently). This was before Quantum released details of the profitability of DLT. Quantum was $6 per share pre-slit at the time. Quantum now sells for less than the value of DLT and you get the world's most successful desktop business for free. Quantum doesn't have the potential to triple in price like it did then, but it has the potential to double and is far better off financially than at that time.

To: Sam who wrote (1665)	12/2/1997 8:29:00 PM
From: LK2	Respond to of 9256

*Off Topic*Sam, talking about Korea/Japan using mercantilsm versus US using captitalism isn't ranting or a digression. It's really as much On-Topic as the newest hard drive out of WDC or QNTM or SEG, and it will affect the stock price of these companies as much or more. Bill Woman, the economic commentator on CNBC, today said that the IMF should, as part of any loan package to Korea, attach strings so that the money will be used in a business-like way, not just to build market share (I'm paraphrasing rather freely). What he meant was the same as what you mean, that money should be invested for a profitable return. If you don't see a profitable return, then you cut your investment, like WDC is announcing it is doing today, by taking current losses instead of throwing good money after bad. Another point Woman made was that, after the 1987 crash, the US market recovery was based partly (I'm translating freely again) on the fact the US dollar dropped in value, which helped our exports. Now the Asian currencies have been massively devalued. That should help their exports massively. Unfortunately for the US exporters (and internationals, whatever), the US dollar has risen strongly this year. So that has negative implications for the US stock market (future price action), even though it might be good for the US consumer. -LK P.S. When Shugart made his statement that things haven't changed in the disk drive industry, I thought he was being arrogant or defensive. You said he was being defensive. But now, with more data available, it appears that he was being blunt and truthful. Maybe, as an insider, he saw more clearly what was happening than us peons in the peanut gallery (which only makes sense). And the stories/articles about the new drive industry (because of lessened competition) was a beautiful Wall Street theory/fantasy, which is used for every industry (like the biotech bubble in the early 90s).