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

To: Pierre-X who wrote (1758)	12/11/1997 5:12:00 PM
From: Sam	Read Replies (1) \| Respond to of 9256

Well, I'm not sure about that. There were close to 3 years or so of pricing stability in this industry until last summer. It may be that these folks didn't reckon on the Big Three meeting their prices (not that likely); or that they didn't reckon on the financial crisis hitting the fan as it has (likely); or that demand would be greater than it is (also likely, especially with the financial crisis). I don't think anyone 6 months ago could have predicted that we would be where we are now. The most anyone could have done would have been to say that it is possible, as in fact several people did. I wish I knew if the Asian guys are getting hurt, what their inventory levels are, what their breakeven points are, and what their capacity is. I think Gus may have posted some of that a few days ago, but I was too busy to pay close attention (attention Gus if you are reading this discussion!). I tend to agree with you about pricing in the near term. While there is financial instability, and questions about which divisions to keep and which to kill or scale back in the Korean and Asian companies, the pressure should be kept on, short term losses be damned. Haggerty said that they won't "participate in absurd pricing to maintain market share", but he didn't say that they wouldn't do it for other reasons (cute, I know, but sometimes it pays to take people literally at their word--maybe not this time, but...). But as you say, it depends on the liquidity and cash reserves of SEG, QNTM and WDC. SEG has the cash--they didn't sell bonds last Feb. when things looked so rosy for nothing. I suspect that the other two can last for a good long while as well, though not perhaps as comfortably. WDC has no debt, probably has access to a fair bit, probably should have taken on some last spring/summer--isn't hindsight wonderful thing? Hope you enjoy the figs, anyway, Sam