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Non-Tech : Image Entertainment (DISK) -- Ignore unavailable to you. Want to Upgrade?

To: Jim Fraser who wrote (130)	5/16/1998 5:34:00 PM
From: William T. Katz	Respond to of 379

Well DISK had a good rebound from $6 after they announced closing their US Laser subsidiary. Certainly, LD sales must be dropping considerably. There might be a spike this quarter as they clear out their excess inventory. Big question remains is whether the laserdisc drop-off is sufficiently built-in to this stock price. Certainly all investors that do due dillgence will know about it. So fundamentally, I do see a reason for the move up. At least two extreme possibilities: 1) [Bearish case] LD sales plummet and DVD sales aren't enough to make up the loss. DISK has bad quarter due to USL write-off and poor revenue + ramp-up of Las Vegas warehouse. 2) [Bullish case] DVD sales surprise everyone and make up for LD drop-off. DISK changes their model to reflect LD as a small quantity even more niche product and focuses on DVD and direct-to-consumer LD. All the news I'm seeing points to DVD doing very very well. The latest James Bond movie had 150k DVD preorders! Likewise, LD sales look pretty bad both from my inspection of the local Suncoast store and the DISK clearance sale. I'm about 20% invested from my eventual target DISK position. So in a way, I'm hoping for somewhere between #1 and #2 where people panic and sell-off to $5 where I accumulate :) You seem to be somewhat bearish on DISK. Don't you think that DVD market will dwarf LD and even with non-exclusivity and possible internet sales, DISK will do much better than during LD period? BTW, I'm looking to re-enter NMBS at 10. Any thoughts there?