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Technology Stocks : Creative Labs (CREAF) -- Ignore unavailable to you. Want to Upgrade?

To: Brian Lempel who wrote (8391)	1/17/1998 10:36:00 PM
From: prakash	Respond to of 13925

Somebody here earlier suggested that Seligman has huge position in CREAF. I don't know if Paul Wick still has that position as of now, but just to remind everybody about what he said about CREAF back in Nov. is as follows.This may also help alleviate some of the doubts people have about the company. Q: What else do you like? Wick: Creative Technology. Q: The Soundblaster company. Wick: Creative reported an outstanding September quarter. Q: Do they still make sound cards for PCs? Wick: Sound cards are still the key product. Creative essentially invented PC audio. About 80% of the company's revenues still come from the Soundblaster product line. The standard, surprisingly, has not eroded over time, despite repeated predictions that Intel or Microsoft would eventually figure out a way to kill it off. The problem is that virtually all PC games have been written to the Soundblaster standard. No one has been able to come up with an emulation of Soundblaster that works 100% of the time. And the PC companies are quite nervous about coming out with a PC that has the potential for incompatibility. Q: At one point, this company had been knocked firmly on its behind. Wick: The stock was absolutely decimated a few years back. The company made the mistake of getting into the CD-ROM business and becoming vertically integrated. They got into that business because they sell CD-ROM upgrade kits with their Soundblaster audio cards. They realized they made a big mistake when the CD-ROM market went through a bloodbath over the past couple of years. Creative exited that business, took a big writeoff. They've since had a significant increase in gross margins, which have risen from a low of around 10% at the trough to 33% in the most recent quarter. Q: So, they're making money again. Wick: The company, in the space of a little under two years, has generated almost a half-billion dollars of cash. They now have $5 a share in cash on their balance sheet. They have lots of new products that have been meeting with some success, including a 64-bit version of the Soundblaster audio card. They've also got a graphics card, which has met with a good response in the market, called the Graphics Blaster. And, maybe most importantly, they have a product that came out October 31 -- a $379 DVD multimedia upgrade kit. At $379, it's far and away the cheapest in the market and it could be a hot product for Christmas. Moreover, the stock is cheap, selling at not much more than one times revenues and roughly 10 times June '98 earnings. Q: Uh, Paul, pardon me, but what is the point of a DVD upgrade kit at this point? There's very little software out there. Wick: The software is coming. The greater storage capacity of the DVD compared to a CD-ROM will be attractive to some people. It's likely to be a niche market to some degree. But on the other hand, there probably will be some people who want it -- maybe they'll install it on their laptops, and use it to watch movies on airplanes. Their first foray into this area, which came out earlier this year, was priced at $500 and it sold very well. So there seems to be some enthusiasm. Q: The stock is trading .. Wick: .. in the mid-20s. Q: And this year, the company should earn .. Wick: ...about $2.60 a share. Q: Cheap! Why do people hate this stock? Wick: It's a combination of things. The company is based in Singapore, although almost all of its revenues come from the U.S. and Europe. The CEO doesn't speak English very well. For some reason, it just isn't on people's radar screens.

To: Brian Lempel who wrote (8391)	1/17/1998 10:44:00 PM
From: prakash	Read Replies (1) \| Respond to of 13925

Another article about CREAF's DVD sales. Sorry, this article is as of Nov. 5. and little outdated, but something to be considered for upcoming earnings announcement. Singapore: Creative Tech DVD Sales Better Than Expected SINGAPORE -- Singapore's multi-media peripheral maker Creative Technology Ltd. (CREAF) said Wednesday that sales of its personal computer digital video discs have been better than expected. Creative has been shipping a six-figure digit of PC-DVD units per month since March, when the first shipment was made, said Mary Rachel Yee, the group's public relations manager. She declined to disclose exact figures. Creative's worldwide orders have exceeded their supplies, Yee said. 'Demand has outstripped supply,' she said. The group has tried to overcome the shortage by allocating their supplies to customers. Yee said that the group was surprised by the strong demand for their PC-DVDs, especially from Europe. DVD is a high density compact disc standard used for storing large amounts of digital video and audio data, with the ability to contain the same amount of information as 26 CD-ROMS. Creative's Yee suggested that sales of the group's PC-DVD drives may improve next year. U.S. research company Dataquest has forecast that one million DVDs are expected to be sold by the end of this year, and sales are projected to rise to 8.2 million by 1998 and to top 10 million by 1999. 'This uncaptured market presents a great opportunity for Creative,' the group said. Creative's PC-DVD drive is currently touted as providing the best value for money at US$379. Creative's shares on the Stock Exchange of Singapore ended unchanged Wednesday at S$41.50 on volume of 93,650 shares.

To: Brian Lempel who wrote (8391)	1/18/1998 9:49:00 PM
From: JessiDani	Read Replies (1) \| Respond to of 13925

Why should't I share what I think and why I sold my position some time ago. Apparantly, a lot of other people sold out also. CREAF is not a microcap with a tiny float that trades 30Kshares a day that no one knows about. Everyone on the street knows about CREAF and the stock is off its high bigtime. Like I said, I hope everyone here makes money. It may be that CREAF will pop on Tuesday. It has done so before shortly before earnings. I also agree that CREAF is positioning itself for multimedia. We will see what happens. In the meantime, these threads are not just for cheerleaders. Also, if every post had to be limited to financial and business news only, then this thread wouldn't get about 60 new posts a day. It probably wouldn't get more than 5 or 6. Good luck. JD