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

To: Nads who wrote (6160)	12/5/1997 4:00:00 PM
From: Rob S.	Read Replies (4) \| Respond to of 9124

Looks like Quantum finished strongly and on nice volume after being up all day - it's one of the leaders in the high tech stocks. It's still too early to call a major reversal from a TA point of view, but my "gut feeling" is that we have clearly turned the corner.

To: Nads who wrote (6160)	12/5/1997 4:21:00 PM
From: Rob S.	Respond to of 9124

What could be the outcome of the current situation among HDD mfgs? WDC has made statements that they are cutting back production on DDs for the desktop market and may get out of the segment altogether. SEG and WDC are both wrapping dollars around every low-end drive they ship and can be expected to continue to lose money unless and until they revamp their designs and production lines to produce HDDS useing highly automated manufacture - similar to what Quantum has already 100% accomplished. Quantum is merging their high-end and commodity HDD manufacture to take advantage of cost reduction benefits and because the gulf between the performance and capacities of the two segments has greatly narrowed, a trend that is likely to continue to a significant extent. This allows them to extend the manufacturing efficiencies that have been developed on the desktop to the high-end server, data storage and workstation markets. That will have some short-term costs (the $40 mil write-off) but should pay good mid and long term benefits. Then as we move into latter 1998 and beyond, Quantum will start delivering high performance, high reliability TeraStore near field floating head products that should intialy fit well into many high-end and government storage requirements and migrate down to high capacity lower end markets. Too early to tell, but the plan is to deliver HDD performance with 10X HDD densities and optical drive media reliability. I think there is a BIG market for that feature set. DLT can be expected to continue to grow but market growth will start to mature in by early 1999 IMO down to a mere 50% per year rate (still a great growth rate). As it matures, an increasing amount of revenue is likely to be derived from highly proitable and sustainable sales of tape media. Eventualy the amrket will turn to look at the good rather than the bad and Quantum will achieve a higher value. I think over a few years time that the gyrations in valuation will start narrow as QNTM develops more legs to the stool of sales and profits.