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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: Frodo Baxter who wrote (3096)	4/27/1998 10:05:00 PM
From: shane forbes	Respond to of 9256

HA! YUP I MOST certainly do! - Increase in LTD was to increase liquidity. This LTD increase did not come at the expense of equity! Further of the LTD only 10% or so is bank debt and that's fine. Convertibles are a pain to equity holders but either do that or pay 9+% interest for a lot of junk-quality debt to bankers and in this instance I prefer the convertibles. Come to think of it I bet they did not have a hope of raising close to 460 mil. in debt from those banking types. Putting 450 mil. or I guess 500 mil. in bank debt on last q's bal. sheet would have been suicidal to everyone involved. - Channel Inventory old junk should not be mixed up with new product ASPs - All the drives are not low-end and crappy. The sweet spot was not low end. There were >38% over 4G. Admittedly <2.5G were 40%. But as they mentioned they are phasing this segment out. At the very least, the correct thing for ASPs is to split the 2.5G and under segement and the over 2.5G segment and work out separate ASPs for each. Blended 160 ASP while a company is going throug a major product transition cycle is worse than pathetic - it is awful - and does squat. We all know that the low end <=2.5G is worthless. The more important thing is how the newer products are doing. ---- The way I see it last q was the q to accelerate the product transition and MR acceleration and junk some of the inventory. This q the next stage - shoring up the balance sheet and getting the new products up and going is coming along. Next 2 qs - as new higher cap. drives ramp up things will be better. And be more explicit with the one-liner insults next time. I could say the exact same one-liner about your comments. The way I see it you saw the c.call the way you wanted to see it. Though things are bad (and no one should realistically expect WDC to improve faster than the non-pure HDD plays - as I've said here I have a 1 1/2 year time frame or around 16 1/2 months left...) the forward visibility has improved. Calling the c.call "pathetic" is one-sided and is not the way I would characterize it. And if anyone else is short don't worry the stock is not going racing up anywhere soon. But things are most definitely not going down the tubes - things are getting better... Shane.