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

To: Rational who wrote (6627)	12/12/1997 10:12:00 AM
From: John A. Shaffer	Read Replies (1) \| Respond to of 9124

You make good points but WDC says the Japanese and Koreans are selling dirves for $90, which WDC sells for $250. The $90 must be below WDC's cost. I don't think WDC will be able to reduce their costs to the point where they will make a profit at $90. John

To: Rational who wrote (6627)	12/13/1997 1:36:00 AM
From: Rob S.	Respond to of 9124

Althouogh I think that the Asian HDD mfgs. Samsung, Fujitsu may dump some inventory to raise cash, I doubt they will do more harm than they already have. They need to pay back massive debt - they can't simply roll it over at low interest rates as they have done in the past. When these companies sit down with the banking institutions and lay out the prospects for revovering their debts, that plan is unlikely to be on th esame path as their "take no prisoners" endless debt strategies of the past few years. Their plan was to build massive capacity and win market share and them make profits to pay off the huge accumulated debt. That just hasn't worked out as expected (or as brought on by visits to opium dens). The governments and bankers must comply with the IMF mandates and will not easily go along with plans that will only lead to lower margins and a lesser chance that the debt will be paid. Quantum got bid up to very high valuations along with many tech stocks. Investors grew intoxicated on the soaring price of their stocks. Meanwhile, insiders of tech and other high-flying stocks were selling their shares this summer & early fall at the highest rate in over 8 years. We can criticize management for what has happened to the stock price, but the only ones responsible in the end is ourselves for not paying close enough attention to the signs that prices were just too high. Once the downside runs its course and we start seeing insiders buying agressively or a number of companies initiating repurchase programs, then it will be time to get more enthusiastic.