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Technology Stocks : Western Digital (WDC) -- Ignore unavailable to you. Want to Upgrade?

To: Tom Schmitz who wrote (8717)	2/10/1998 7:22:00 AM
From: emil	Respond to of 11057

I'm out for now as well. The last announcement did it for me! I figure at least 30 days will pass, I will get the huge tax loss to start 98, then I can get back in for the second half and perhaps recup some at these or better levels. I dont see WDC going anywhere fast, although it will recover, and perhaps do well once industry mess clears up. With asia where it is, i see it extending for a bit for the dd's.

To: Tom Schmitz who wrote (8717)	2/10/1998 7:36:00 AM
From: emil	Read Replies (1) \| Respond to of 11057

The math is awefully bearish short term. For whatever it's worth: WDC: Major Broker decreased estimate for fiscal year ending 06/98 from $0.30 to $0.03 on 01/30/98 WDC: Major Broker decreased estimate for fiscal year ending 06/99 from $1.05 to $0.78 on 01/30/98 WDC: Major Broker decreased estimate for quarter ending 03/98 from $-0.16 to $-0.41 on 01/30/98 WDC: Major Broker decreased estimate for quarter ending 06/98 from $-0.19 to $-0.30 on 01/30/98 WDC: SANDS BROTHERS decreased estimate for fiscal year ending 06/98 from $0.16 to $-0.15 on 02/06/98 WDC: SANDS BROTHERS decreased estimate for quarter ending 03/98 from $-0.24 to $-0.50 on 02/06/98 WDC: SANDS BROTHERS decreased estimate for quarter ending 06/98 from $-0.23 to $-0.35 on 02/06/98

To: Tom Schmitz who wrote (8717)	2/12/1998 6:37:00 PM
From: Thomas Haegin	Respond to of 11057

Tom, being long WDC from $36 sure must hurt. I think it will take more than 1 year to get back up to there. Probably longer, as EPS will not skyrocket for the forseeable future. WDC is a good company though, IMO. Thomas

To: Tom Schmitz who wrote (8717)	2/14/1998 2:56:00 PM
From: Carey Thompson	Read Replies (3) \| Respond to of 11057

Tom S. I had a busy wk at work, so I could not respond to your fine questions any earlier. To refresh your memory you asked abt 1) the current WDC debt issue, and 2) the prospects for WDC. I will answer question 1) now, and get to question 2) later. 1) I went back over my spreadsheets looking at WDC's capitalization structure fr 1983 - 1997. A good short defn of the capital structure is the % of assets financed by either a) long term debt, or b) perferred stock, or c) common stock. Short term liabilities are not used on the theory they will be paid off quickly. On my spreadsheets I define long term debt as BONDS + LEASE OBLIGATIONS + OTHER (usa. deferred taxes). Perferred stock is self explanatory, and since WDC does not use this type of financing is a moot point. Finally, common stock is COMMON STOCK & PAID IN SUPLUS + RETAINED EARNINGS. The following chart shows WDC long term debt / assets or debt capitalization: Year long term debt / assets Notes 1997 5.116% no bonds out 1996 3.452 no bonds out 1995 3.232 no bonds out 1994 20.980 1993 59.616 1992 69.592 1991 57.358 1990 33.035 1989 35.290 1988 31.543 1987 12.357 1986 41.888 1985 21.872 1984 25.758 1983 19.816 The chart shows WDC debt capitalization has been up and down over the last 15 yrs, and only recently has WDC had no long term bonds on its balance sheet. It should come as no surprise to any one that WDC will use long term bonds to finance its operations given its past. The argument about WDC doing something underhanded by not filing the correct forms with the Securities and Exchange Commission is not complete. Anyone with this view can get their questions answered by accessing the SEC Edgar database, looking up Western Digital Corporation, and reading WDC recent filings. Or simply call WDC and speak with their finance people (or ask investor relations to speak to the finance people and get back to you). Recently, I saw a post to this board stating WDC has floating $400 mill in this recent long term debt offering. I assume this is correct. Using the Jun 30, 1997 balance sheet as a what-if base for calculations: the what-if long term debt / assets is about 35 - 40%. As compared to just over 5%; so this a major change, yet not outside of the historical range. Nor uniquely high. Another needed comparison is to the capitalization of its disk competitors. I hope another reader will take time to make that comparison and report back to us. I noticed WDC recent bonds were zero coupon bonds. A quick defn of zeros are bonds sold at a discount to face value, paying 0 interest, and redeemed at face value at maturity. The important thing is WDC will pay no interest on these bonds, which should help more revenue drop to the net income line -- very good for the shareholders. As an aside back in 1991 when WDC went to its bankers and asked for more time to pay its short term debt, its credit was so bad zero coupon bond financing was out of the question. WDC finances have come a long way, indeed. Thanks for your time and good luck investing Carey Thompson