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 : VLSI Technology - Waiting for good news from NASDAQ !!! -- Ignore unavailable to you. Want to Upgrade?

To: DanZ who wrote (3182)	3/17/1998 8:52:00 PM
From: Joseph E. Caiazzo	Read Replies (2) \| Respond to of 6565

Dan: Generally I think you are right that stock prices reflect investor expectations, but vlsi suffers from two factors that do affect these expectations but which you did not mention. One, is vlsi's known inability to CONSISTENTLY deliver on earnings promises. They have a history of being erratic earners and the market knows it. Two, and also related to the first point, is the "other shoe syndrome". Having heard that the principle customer Ericsson has delayed orders because of what has been described as "inventory correction", and knowing that Ericsson is in fact selling phones like mad, it is reasonable to fear that Ericsson has merely given some lip service to vlsi before delivering the coup de grace. I know in fact that Ericsson has been talking to Texas Instr. and has informed vlsi that they wanted a second source for the chips. I don't know how far along this second source contract has gone, but it may be one of several causes for the decrease in vlsi's sales to Ericsson. Anyone purchasing now is truly speculating that the Ericsson contract is completely intact, and in fact it may not be and vlsi might not even know it themselves. But knowing vlsi's history, an investor must conclude that there is reasonable chance that sales to Eric. will be curtailed...ie...the other shoe dropping....and this uncertainty must be factored into the stock price. Good investing JEC