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Technology Stocks : Applied Magnetics Corp -- Ignore unavailable to you. Want to Upgrade?

To: William T. Katz who wrote (10904)	12/9/1997 10:03:00 PM
From: Don Earl	Read Replies (3) \| Respond to of 12298

Hi Bill, I did ask about the relationship with WDC. He was very adament about WDC continuing to be a good customer. He did say there were 35% fewer orders than last quarter. Using that figure, 26.84% margin and the average of the first 3 quarters of FY 97 for expenses I came up with .31 or .25 fully diluted. I'm still figuring .35 for the one time charge, mainly because other companies I've seen do a restructuring charge tend to knock off about a third of the bill for tax credits. From the conversation I understood there to be a substancial difference in price between MR and TFI. I assume any company wishing to target the $1000 and under PC market would use the less expensive head. Cadilacs are better than Chevys but more people can afford Chevys. The only thing that set off my BS meter was when I asked about why they wanted to be approved for an extra 40,000,000 shares and didn't that seem like quite a few more than necessary. I don't recall his exact response but it sounded to me like a snow job. I'll vote against it. They have to go to share holders anyway if they want to issue more than 20% of shares out standing. If they want to give stock to employees, let them buy it on the open market. If they need to raise cash they are already approved for up to 40,000,000 shares and should be able to raise $90 million even at book value if they need to. Once again I want to stress that while I'm trying to pass on the information as carefully as possible, it is second hand, and subject to error on my part. Regards, Don