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Technology Stocks : SYQUEST -- Ignore unavailable to you. Want to Upgrade?

To: magick who wrote (6109)	4/9/1998 8:24:00 AM
From: John P. Henrie	Read Replies (1) \| Respond to of 7685

Magick: $150 million profit??? Just a couple of thoughts -- Where do you get $50 bucks per drive? Syquest has been unable to generate a postive gross profit margin since any significant introduction of the Sparq. Syquest has a longways to go before they start seeing any margin (before SG&A) on the Sparq. Your numbers also left out SG&A and other expenses that are deducted from the gross profit margin to get to net profit margin. It easy clear that, Syquest has a long ways to go. An about this fight over which is going to do better -- IOM or SYQT. Quite frankly, they are both doing terrible when it comes to stock performance. IOM stock price benefited greatly from the introduction of the ZIP. One would naturually would expect the same kind of action with Syqt's stock price given the introduction of the Sparq. However, there are some significant differences. Namely, Syqt's funding of operating losses with stock and warrants (at very low prices, I might add), and the potential market for Sparq. How large is the market for Sparq? Is the Sparq a niche product for techies and media companies with lots of storage needs or will it be bought by the masses. Granted the $199 drive price is attractive, but how many people need a gigabyte disk(s)(@$30 a pop) of storage when their computer comes with multi-gig storage needs. It will be interesting to see how this plays out. Later, John

To: magick who wrote (6109)	4/9/1998 10:22:00 AM
From: Dale Stempson	Respond to of 7685

Re: "Where do you get your figures?" As indicated, it was just my own estimate to emphasize a point. When looking out through next year you have to expect future price reductions and increases in shares outstanding. A significant variable in that rough example is their future Net Profit Margin which I believe is unlikely to rise above 4% at best. Re: "If they begin producing 500k drives a qtr, and make $50.00 a drive and also sell 1 three pack of carts with each, and make around $40 a three pack. That's $180 million profit." If SyQuest can produce numbers like yours through 1999, they will become the most profitable DD company in the history of the world. Good luck. Regards - Dale