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To: Jonathan Bird who wrote (11354)	1/29/1998 4:55:00 PM
From: James F. Hopkins	Respond to of 12298

Jon; My analysis, is not really a analysis, it's just a seat of the pants "best guess" based on past observations of bid/ask spread on other issues, it don't have any hard fast rule to it that one can apply to all issues or situations. Like at the dog track we know the 1 or 2 box will have an edge over the outside boxes all other things being equal, but they seldom are, and some days it will swing to the outside box depending on track conditions. Things change; I looked today and SEG and WDC trading don't make any sence to me at all and I don't know why but my guess is they are going to fall some more, just a guess but not strong enough to want to make me bet on it. QNTM seems to have a pattern, as does APM , but with SEG, and WDC so mixed up I would not count on any pattern to hold in this sector. Lots of knee jerking and twiching going on. <G> Jim

To: Jonathan Bird who wrote (11354)	1/30/1998 5:14:00 AM
From: Jonathan Bird	Read Replies (1) \| Respond to of 12298

I just heard the WDC conference call. Since WDC is APMs sole customer I thought I would recall some of the info that came out of that call, particularly as it relates to APM. The increase in the special charge since Dec 2 is primarly due to cancelation charges associted with additional thin film cutbacks. Part of the charge is set aside for Q3 and Q4. In house inventory(in dollar basis) is currenty more TFI then MR. About 8 weeks worth. Normal is 4-5 weeks. The transition schedule to MR is as follows: DEC 20% Mar 40% Jun >80% (emphasis on the greater) Said they did not expect any problems getting componets. Last QTR was not the end of oversupply in industry. Current Qtr still showing oversupply. They gave absolutely no indications of when things will ballance. Only said that historically it takes 1-3 Qtrs. They recognized that SEG and QNTM are also taking proper steps to reduce production. When asked about Maxtor and Fujitsu they said suggested someone should ask Maxtor and Fujitsu. My read: It was clear from their comments that there is no way to know in advance when this oversupply will end. We will only know when it occurs. ASPs have come down drastically in this enviroment and are not expected to return to previous levels, although they are expected to recover to a degree. Current drives for sub-1000 pc are supplied by excess inventory in the market. Not making profit on drives supplied to this segment. They have plans to begin a new drive line that will be profitable in this segment once things get back to normal and the excess drives run out. Rufused on several occasions to talk about time lines or margins on this program. Margins on a per platter basis are the 1.3, then 2.1, then 2.8 in increasing order. The End Its unclear to me if the forward looking statement in the APM earnings release took into account WDCs most recent acceleration from TFI. That is, any more recent then the WDC Dec 2 release, and the Dec 8 APM recognition of that release. One thing I know for sure is that there was nothing in the call that would be bullish for APM. For WDC holders, if your reading this, there was nothing bullish for you either. Thats the honest truth. There is no end in sight. That said, thanks to WDCs creative accounting to show a profit, I expect WDC to go up tomorrow. I am not, and have not, been short WDC. But I will short into strength if it gets out of hand. Jon Bird