Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : SYQUEST -- Ignore unavailable to you. Want to Upgrade?

To: Urlman who wrote (5645)	2/23/1998 9:59:00 PM
From: MoonBrother	Respond to of 7685

Latest Report on SYQT --------------------------------- SyQuest's Fate Hangs On SparQ (02/23/98; 10:34 a.m. EST) By Gabrielle Jonas, TechInvestor * SyQuest Technologies, written off for dead by Wall Street, veered off course by chasing a competitor, but analysts say the company could rebound if investors are willing to wait. * Nevertheless, a new management team at SyQuest, led by president and CEO Ed Harper, has recharted the course of the company, making the SparQ -- a removable disk drive positioned between Iomega's Jaz and Zip products -- the company's centerpiece. * Howard A. Rosencrans, an analyst with HD Brous & Co., puts the blame squarely on SyQuest. "Prior management put them in the state they're in," he says. "They introduced a price cut that was too expensive to produce, and tried to target the Zip drive, which was already a much more successful product with huge momentum." * "SyQuest products are generally considered very good, but the products themselves are probably more appropriate for more sophisticated users," Tenney says, "whereas the Iomega products were probably perceived as more applicable to the mainstream consumer. SyQuest was probably at the time engaged in a strategy that didn't really fit with who they were." * The new management team has fixed that by trotting out new, more competitive products, including SyJet, which competes with Iomega's Jaz drive, and SparQ, positioned on the continuum between Zip and Jaz. * "Early indications are that the product [SparQ] is being reasonably well-received in the marketplace, but there hasn't been adequate supply yet to really make a dent on SyQuest's earnings picture," Tenney says. * Upside Potential? Most analysts, though impressed with the new management team, are guarded in their view of the company's prospects because the company's future hinges on the success of the SparQ. "They did a good job in shipping around 40,000 of the new SparQ drives, but it was still less than expected," Tenney says. "They're on a fast ramp through the March quarter, they have the opportunity to penetrate a very large market, the demand seems to be there. Now, it's a matter of their own execution." * SyQuest management does not seem to be making any promises. In its first quarter earnings statement, SyQuest CEO Harper didn't give much of a preview of things to come. "We plan to significantly accelerate unit growth in the second fiscal quarter," he said. "We have made a management decision to focus resources on the opportunities created by SparQ, with a strategic transition to this product as the backbone of our corporate future." * Analysts agree that the stock will not be in good shape for some time -- if ever. "I would still characterize the stock as extremely speculative," Tenney says. "I think there's opportunity there. They're still losing a substantial amount of money. Do I think they're a lost cause? No. They've got an opportunity here to succeed." But profitability involves a wait on the part of investors, he adds. "Profitability is some time away -- at least six months, I would imagine." Chance for SyQuest's comeback: Fair techweb.com