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Technology Stocks : Western Digital (WDC) -- Ignore unavailable to you. Want to Upgrade?

To: Frodo Baxter who wrote (8041)	12/5/1997 5:03:00 AM
From: Rational	Read Replies (1) \| Respond to of 11057

Lawrence: WDC's DD margin could be higher in the past due to their cheaper TFI heads. Given that WDC will use MR heads in future, this historical margin will erode drastically. WDC is also behind the rest of the market in this regard. The relevant margin should not be based on past figures. WDC was trading at a higher price than QNTM for some time because of this historical margin which will vanish very fast, IMHO, unless they have a magic wand. Sankar

To: Frodo Baxter who wrote (8041)	12/5/1997 7:35:00 AM
From: T Bowl	Respond to of 11057

Lawrence - You're back... Been quiet for a few days. I figured Guido was searching campus looking to cut your thumbs off if you didn't come up with that margin call :) You maxed out now? WDC Takeover!?! I'll say I heard it from you first... todd Don't worry, I'm not laughing at you, I'm crying with you.

To: Frodo Baxter who wrote (8041)	12/5/1997 11:01:00 AM
From: Pierre-X	Read Replies (1) \| Respond to of 11057

Re: QNTM; Inventory bubble; D&A; Takeover Thanks for the reply LK. Good to see somebody's actually looking at these things. The inventory bubble you describe seems to have been a phenomenon at nearly every DD vendor. In the nature of a pseudo-commodity industry such as this, inventory bubbles at one vendor hurt everybody, particularly in the channel where switching costs are nil. You were right about the D&A, I misread the 10Q! I think any takeover prospects are nil for the following reasons: 1. I really don't think any DD vendors are looking to dramatically increase their capacity right about now; reference the failed efforts of Sing Tech to find a buyer for Micropolis. 2. WD has considerable franchise value in their brand name; a buyer would have to consider continuing production of drives under the WD brand. The inevitable product line conflict would not appeal to a suitor. 3. Consolidation through takeover generally occurs in growing industries, or industries characterized by a large disparity in strength between players. Right now I'd say everybody's too busy keeping their own sheep from dying to think about the neighbor's sheep. PX Postedit: I take it back, IBM may be a buyer. Many factors in favor: . they have the dough . they do want to bust into the storage biz . they have been a big buyer of WD products in the past . they have no low end desktop drives, and . they haven't been shy about big acquisitions in the past hmmmmm