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Technology Stocks : YURI ( YURI SYSTEM ) -- Ignore unavailable to you. Want to Upgrade?

To: The Phoenix who wrote (797)	3/11/1998 5:27:00 PM
From: Beachside Bill	Read Replies (1) \| Respond to of 1181

<NN is such a loser, I wonder how long they'll be in business.> ASND +0.72 % BAY -2.82 % COMS +1.26 % CSCO +2.04 % NN +3.55 %

To: The Phoenix who wrote (797)	3/11/1998 7:42:00 PM
From: Hugh Johnson	Read Replies (2) \| Respond to of 1181

Gary, "YURI needs to decide whether they will sell predominantly direct and build this model out or through OEM's. They appear to be taking the OEM approach. For OEM's to compete they'll need deeper discounts than YURI would typically offer end users. This will effect [sic] margins. The larger percentage of sales through OEMs, the slimmer the margins. Is this difficult to understand?" No, but your previous statement was unclear at best - it could well have been a reference to operating margins. Forgive me, but my English is sometimes inelegant also. I agree with you on the basic assumptions of the OEM model, although it's not a given that margins will erode. I do not have a working model of Yurie's manufacturing cost scales, but I believe that the relatively small size of its current business leaves them with significant opportunities to reduce marginal costs. I also understand that component suppliers are facing intense competition, which can be a major benefit to Yurie. Last quarter the company has been heavily dependent on OEM's and I did not see margin erosion. The results of this quarter will give a clearer picture of the evolving sales model, preliminary indications are that direct sales are robust, sans SplitRock, and the company is comfortable with current estimates (as they have been every quarter heretofore). Chris Stix of Cowen believes there is significant upside potential to the current revenue estimates. I don't think the debate about SplitRock is useless, because you raise some critical issues. Kwok Li is a member of the board of directors of Yurie Systems, and presumably has a handle on how many LDRs Splitrock is buying. There is a concept in the law regarding what is reasonable. I am not a lawyer, but I would appreciate some input from someone with a legal background regarding this type of disclosure issue. Regards, Hugh BTW, CSCO has a higher price/sales ratio than YURI. Do you think CSCO is a short now?