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Technology Stocks : The New QLogic (ANCR) -- Ignore unavailable to you. Want to Upgrade?

To: Tom Duxbury who wrote (13661)	1/14/1998 2:39:00 PM
From: George Dawson	Respond to of 29386

Tom, Great post. George D.

To: Tom Duxbury who wrote (13661)	1/14/1998 2:58:00 PM
From: Craig Stevenson	Read Replies (3) \| Respond to of 29386

Wow, has this thread deteriorated over the last few days. At the risk of inviting any more profanity and mud-slinging from those who refuse to adhere to basic rules of civility and SI's own terms of use, I'll offer up a couple of bits of information from my research. (Some of us actually spend more time researching than complaining.) Skeptics are free to ignore this post in its entirety. 1. There has been a major hue and cry over Ancor's lack of visibility in the trade magazines. (In my opinion, a good portion of that criticism was deserved, and some of it came from me. <g>) However, I read something last evening that is slowly changing my opinion. There is a "Special Advertising Section" in the January 15th issue of Network Computing magazine entitled, "Network Storage Quarterly". This section is 19 pages long! There are 12+ pages of text! I don't know who paid for this, but there are tons of quotes from Brenda C. (Brocade) and Carla K. (Ancor). This article reads like a "Who's Who" of Fibre Channel. These are the names mentioned: Brenda Christensen, Brocade Mark Stratton, McData Tom Ruwart, University of Minnesota Mike Kane, Emulex Walt Hinton, StorageTek Bill Lozoff, Gadzoox Doug Fierro, EMC Kevin Metcalfe, Intelligent Solutions Nick Allen, Gartner Group Carla Kennedy, Ancor John McConnell, McConnell Consulting Those of you who follow this technology should get a copy of this magazine for yourselves as part of your due diligence. (There is a LOT more information there that I'm not going to post here.) Those of you who are negative about Fibre Channel, and know how to read, should do the same. Draw your own conclusion. 2. Has anyone considered what even ONE OEM would do for Ancor? I'll give you a hint. Consider what the Sequent contract was worth to Brocade. (Also consider what it's loss was worth to Ancor.) Sequent carries a current market capitalization of about $770 Million, and the last revenue figures I have are about $600 Million per year (1996). I seriously doubt that most of the naysayers here could even name the top 3 potential OEMs for Ancor or Brocade, or even have a clue about their size. Here is the hint. In my opinion, the top 3 potential OEMs (if I'm right) carry a combined market capitalization of $179 Billion, and did about $123 Billion in revenues. I'll give you another hint. SUN has been talked about here quite a bit, but there are actually two other OEMs that might even be preferrable. So far, those names HAVEN'T been discussed. A little due diligence will certainly uncover at least one of those potential OEMs, for those willing to do a little work. Ancor could probably do quite well with even 1 of the major OEMs, and a handful of smaller ones. As someone else posted earlier, Ancor's revenues are actually rising, even without storage revenue. (Q4's revised estimate notwithstanding. I suppose it will actually be an improvement over 1996 even more disastrous Q4.) 3. Here is a small news flash for the proponents and the skeptics. My sources indicate that the application for the Litton deal involves both voice AND data. (Any lights go off on that one?) 4. Another bit of information from my research. How many drive makers are producing Fibre Channel drives? One, Seagate, right? Wrong! Seagate is the only one currently in volume production, but there are at least FOUR other companies providing drives to OEMs. (Brenda C. said it, so it must be true. <g>) As others have said, if you don't believe that Fibre Channel (and Ancor) has a future, sell or short. If you do, buy or hold. It really is as simple as that. The same type of adolescent behavior that ruined the ANCR board on The Motley Fool is hard at work here, trying to do the same. Those of us that have been long ANCR for a long time know (and accept) the risks. We aren't interested in owning MSFT at 130, hoping that it will go to 260. ANCR only needs to move from 5 to 10 to get us that kind of return. And in case anybody has forgotten the history of Microsoft, where would they be if IBM had been able to complete their FIRST phone call regarding DOS? At this point in time, ANCR is still speculative. ANCR would certainly be a much safer investment after a few OEM deals are signed, but I doubt you will be able to buy it for $5.00 at that point. On the other hand, if Ancor doesn't get ANY OEM deals, you might be able to buy it even cheaper. <g> Caveat Emptor. Craig