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Technology Stocks : Adaptec (ADPT) -- Ignore unavailable to you. Want to Upgrade?

To: Mark who wrote (1213)	3/17/1998 8:16:00 PM
From: Camron Rafizadeh	Read Replies (1) \| Respond to of 5944

Real question is: " How can a company show 40% growth rate on all major parameters consistently over > 6 years".....the answer is ..... Let me rewind a little bit here. This question is directed at past so the answer is fairly straightforward, isn't? Let's answer it in real simple language not on "all major parameters" lingo. With All due respect, what's missing in Mark's analysis is technology element which is big one on its own. Understanding technology in high growth sector is essential in evaluating the CO's performance. This is often missing from wall street analysis. As you can see, Mark does not talk about the nature of technology and the new products that have been introduced right before/after the big nose-dive. We hear a lot about fundamentals and why they are not in right order by him. I saw one post that tried to explain acquisition of the Symbois with respect product needs and future technological growth which in turn translate into more $! So let me say it bluntly Mark is waiting for 20% (entry point of $18-$19) nose-dive and 75% rise ($32-$35). The rest of us are happy with 50% rise. One more thing if this stock drops to around $18-$19, it is not worth keeping at all! Again this is my opinion not the facts! Little Man, Camron

To: Mark who wrote (1213)	3/17/1998 8:30:00 PM
From: Patient Engineer	Read Replies (1) \| Respond to of 5944

Mark, Thank you for your excellent analysis. Re:"I am not a holder yet (and I never short), and would love an entry point <$20 plus some answers to those questions ! (The "dilution" one could easily take this stock down 10 - 20%)" Here is what the press release had to say about financing of the deal: "Assuming the necessary regulatory clearances are obtained, Adaptec will complete the transaction by purchasing all of the outstanding stock of Symbios for cash, using a portion of Adaptec's cash reserves and some borrowings. This acquisition will be accounted for under the purchase accounting method. Adaptec will evaluate the allocation of the purchase price to assets acquired, which include in-process technology that will be written off, and goodwill which will be amortized over the benefit period." So there will be no dilution. Adaptec traded one asset (cash) that earned $20M/year pre-tax, for another (Symbios) that earns $69M after tax ($100M pretax?). Plus Adaptec's taxes will drop for a time due to the R&D writeoff. Costs will be lowered assuming they can keep the fabs full with their own chips. Pricing power will be increased due to the consolidation of Symbios as competition. There is some risk to the integration process, but their return on assets is up 500% for the deal. Seems pretty good to me. With Symbios out of the picture, is there any credible competition for Adaptec in SCSI chips?