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

To: Camron Rafizadeh who wrote (1288)	3/22/1998 2:41:00 AM
From: Steven Hsu	Read Replies (1) \| Respond to of 5944

What exactly is a "Chinese whisper?" None of my friends or relatives seem to know.

To: Camron Rafizadeh who wrote (1288)	3/22/1998 8:56:00 AM
From: Starowl	Read Replies (1) \| Respond to of 5944

Camron: re: " we should all pitch in and buy Mark some ADPT shares, now before it is too late and keep him happy and around!" Maybe, but only if the price drops to $18.50. ;-] Fair's fair. That's when he said he may buy, I think. In reference to the lawsuits, this excerpt from Adaptec's 3rd Qtr financial statement: "the outcome of the lawsuit will not have a material adverse effect on the financial position or results of operations of the Company." That said, the suits doubtless contribute to the pall over the stock price at the moment. And for what it's worth, also from the financial statement and as a reminder to investors in Adaptec: "Certain Risks Associated with the Computer Peripherals Market. As a supplier of controller circuits to manufacturers of computer peripherals such as disk drives and other storage devices, a portion of the Company's business is dependent on the overall market for computer peripherals. This market, which itself is dependent on the market for personal computers, has historically been characterized by periods of rapid growth followed by periods of oversupply and contraction. As a result, suppliers to the computer peripherals industry from time to time experience large and sudden fluctuations in demand for their products as their customers adjust to changing conditions in their markets. If these fluctuations are not accurately anticipated, such suppliers, including the Company, could produce excessive or insufficient inventories of various components which could materially and adversely affect the Company's business and operating results. The computer peripherals industry is also characterized by intense price-competition, which in turn creates pricing pressures on the suppliers to that industry. If the Company is unable to correspondingly decrease its manufacturing or component costs, such pricing pressures could have a material adverse effect on the Company's business or operating results." Camron: I know you are a researcher, so the above isn't for you. But it sometimes helps for all investors (including me) to read carefully the financial statements for risks associated with the investment. Have a good day, Starowl

To: Camron Rafizadeh who wrote (1288)	3/22/1998 1:12:00 PM
From: Mark	Respond to of 5944

Camron, I think you made a great post, especially as you have done so in a 2nd language, but that's the second time you've had a direct dig at me, and I'd prefer you stopped :) (The personal bits that is, not the posts !) Anyway, some points - 1) The computer peripherals sector in Q4 was partly damaged by the performance of disk drives. Firstly there had been a build up of inventory which had to be cleared - i.e. fewer sales. Secondly, due to general oversupply problems prices tumbled to preserve market share. This possibly accounts for a significant chunk of the drop. If this increased the average overall market share of SCSI peripherals then I would expect this to have a beneficial effect on ADPT's controller unit shipments. However, general pricing pressures in this area would probably also deflate ASPs (Average Selling Prices) and margins. 2) Whilst a lot of ADPT's sales accompany peripherals, I suspect that their business model probably has more in common with the semi segment. You seem very well informed on the sales by sector. Do you have any numbers for daily market caps by sector ? That might confirm or deny my observations of Thursday/Friday. 3) I have no personal feeling on the lawsuit situation other than the US seems to me (as a Brit) to be the most litigious country in the world. Most lawsuits seem to be without foundation, and contrived as a means to line lawyer's pockets. However, a fellow poster on this thread seems convinced that the company's statements were misleading at a time when they knew better. His conviction seems supported by the link I posted. If there is a lawyer at this thread (and who has not been offended by my litigation comment :) perhaps they might provide a second opinion ? I did not post it to propagate Chinese Whispers, rather because it seemed closer to the heart of this issue than anything else I've seen. The poster appears to have read some of the case notes and seems to have a professional opinion ? Anyway, we are in agreement that the suits are unlikely to have any direct financial effect on the company. HOWEVER, if the suits do have foundation, and officers are proven to have profited, then it could cause significant damage to confidence and potentially force the departure of key personnel. This would make it of interest/relevance. The uncertainty of this matter will also surpress market confidence until it is resolved. 4) The Cowen estimate is for the year we are just about to start. I would expect, that because it has only just been produced, it takes into account the effects and consequences of the Symbios integration as well as updated observations regarding market conditions. (Possibly with more realistic consideration of the true fall-out from the SEA situation - i.e. something Dr Zeev has alerted us all to, both here, and in other threads). For these reasons it is logical that their revised estimate for '99 will be lowered. I further suspect that if this is one of the earliest revisions, (and perhaps someone who has a good link to current earnings estimates can confirm this) we will now see a wave of similar downward earnings estimates for '99. . Camron, I am not trying to single-handedly damage this party, but you do seem sensitive to certain adverse analysis of ADPT ? Perhaps it is just the way I phrase things ? The bottom line is that I believe that ADPT has not bottomed yet, and whilst I am the most vocal of recent posters in this respect, it is not because I stand to gain directly by driving the price down. My only interest is finding the best time to join you in partial ownership of a company that we all hope has great future prospects. Mark