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

To: Curbstone who wrote (9415)	2/6/1998 2:50:00 PM
From: Savoirman	Read Replies (1) \| Respond to of 13925

Hi Aloha Mike! There is no "hostility" toward Creaf in Singapore. Not from investors, not from government (which has given it loadsa research money and tax breaks), and certainly not from the general public. There is however, quite a bit of nervousness about the volatility of earnings, given its history. This is largely in FY96 and early FY97 when Creaf exited the CD-ROM business and two founding members left the company. As you know, the share price went to as low as S$5.05 on August 15th 1996 from a high of S$36 two years earlier (soon after the introduction of the shares on the SES). People are getting more comfortable with the company lately, especially after 5 very good quarters, but many funds are reluctant to buy the stock because (1) they don't understand technology in general, (2) soundcards, soundchips, DSPs, ISA, PCI, INTC-A,B,C,D, USB, IEEE 1394, MIDI, XG, FM synthesis, wave-table synthesis, DVD-ROM, DVD-RAM, Divx, DVD-RW, AC97, DirectX, system-on-a-chip, MMX, ActiveX, etc. etc. etc. is way too much trouble to spend on one stock (3) some of them had lost money on Creaf in the past and were too dazed to ride it up to S$46 recently. It will take time for them to learn about technology in general, and Creaf in particular. And with more knowledge, they will be more comfortable buying the stock. Also, given the size of the company, and the complexity of the technology, Creaf is easy prey for analysts who want to generate commissions. Most clients will not know what to ask if an analyst downgrades the stock, given the technicalities and the global nature of its markets (after all only 4% of Creative's revenue come from Singapore). As for Reuters, I know the wire has policies that govern how earnings reports are written. This includes mentioning the figures including one-time items first. Then mentioning the figures excluding items. It's just house style. I don't think there was any intention of bad-pressing Creaf. The newspapers have been quite fair to Creaf, especially Business Times has been very accurate in reporting what Sim Wong Hoo (actually) said. And locally, Merrill Lynch has been a long-time bull on Creaf (this carries weight because ML is the biggest player on the SES) so sentiment on the stock has been very good among younger investors who understand tech better. Actually, it is precisely the poor understanding of tech that has created this marvellously undervalued stock. Based on the posts here, you guys are miles and miles ahead of the average fund manager in Singapore in terms of understanding Creaf's technology and market potential (some of you just gotta brush up on accounting and valuation). I'm loading up while the going's good. Best of luck

To: Curbstone who wrote (9415)	2/7/1998 12:08:00 AM
From: eddie	Read Replies (1) \| Respond to of 13925

I don't know saying Creative is secondary listed in Singapore is a bias, but the bulk of shares are listed in Naz. I don't mean to be sarcastic or rude to Saviorman but are just pointing out that share buy-back is not going to happen as fast as he says, here in Singapore. I certainly don't like the way Reuters put up the news on the earnings, and got out the big portion of my holding the morning after. Bias or not, it's not something most of us can do about. Because of the way Creaf reacted the few times on bad press, I don't try to rationalise why those guys are doing it or why Creaf are always such a target. Volatility is the word for this stock and now I run like hell when even there is a shred of bad news. Maybe I sounded quite arrogant in my response to Saviorman, so I am now stating that this are what I really felt and I have no intention to belittle him or anything, so if my words touch anyone's nerve here, I apologise. I must also state that I am quite heavily on margin on this stock, which is the reason I took losses and got out before the stock reacted badly. Past few times it happened, it was hell for me. Of course again I must state that I have made quite a few from this stock, and that Creative is a good company and I still think that with more quarters of consistent and good earnings, we should see a more stable upward move of the prices rather than the volatile nature it now has. But with the big December price drop, I think it's uptrend has been broken, and will probably drift for quite a while before something fantastic push it back up again. Edd.