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Technology Stocks : Silicon Graphics, Inc. (SGI) -- Ignore unavailable to you. Want to Upgrade?

To: Jim Davison who wrote (4572)	3/27/1998 9:01:00 AM
From: Peter S. Maroulis	Read Replies (2) \| Respond to of 14451

Just heard on CNBC that SGI reports ( Warned ) Significant Revenue decrease and Earnings will not meet expectations....... Here we go again ! ! ! ! !

To: Jim Davison who wrote (4572)	3/29/1998 12:22:00 PM
From: brushwud	Read Replies (1) \| Respond to of 14451

Why the sombrero? Presumably, spinning off MIPS is in shareholders' interest, and either SGI will retain ownership or distribute it to them. Bill Kelly was explicit in the January conference call about the desire to move MIPS more "into the forefront" as an independent entity. If it is indeed a "productive enterprise", it is probably only in the last year or so due to the success of the licenses for the Nintendo 64 chips. SGI did not create MIPS, except in the sense of being their best customer, and therefore the source of whatever success they had. Both companies were started by Stanford professors with backing from the same venture capitalists and went public around the same time. MIPS was losing $100 million a year when Ed went for the merger despite the fact that SGI had full licenses to produce and enhance MIPS designs whether MIPS survived or not and the fact that top designers like Tom Riordan and Ray Kunita (founders of QED, Inc. and suppliers of chips to SGI for low-cost workstations and now TCI for set-top boxes) had already left MIPS. The talk of spinning off Alias/Wavefront/Paragraph as well reinforces the idea that vertical integration doesn't offer economies of scale. Of all SGI's acquisitions of the past six years, this would leave only Cray, which caused the most problems and has the most questionable value. Their expected revenue for this quarter is about the same as what they did two years ago before the Cray merger. > On a more sombre note, I think that SGI's spin-off of MIPS might be due to a > fundumental shift in the psychology of the company. SGI is all about delivering incredible > 3-D solutions. In their early days that brought them to create MIPS -- which turned out > to be a productive enterprise. BTW, didn't I see this same posting on another board? I wish I could read all the boards without a lot of cross-posting.