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Technology Stocks : The New QLogic (ANCR) -- Ignore unavailable to you. Want to Upgrade?

To: KJ. Moy who wrote (17181)	7/11/1998 8:49:00 AM
From: Craig Stevenson	Read Replies (1) \| Respond to of 29386

KJ, I agree that we don't know all the details, and much of what we say is speculation. However, it is NOT speculation to note that the stock price is at $3, and is trading near an all-time low. Indeed, financing is the major issue. When Ancor did the last round, I breathed a sigh of relief, because I thought it would be the LAST round needed, unless a HUGE OEM was signed and capital was needed for the ramp. Now, I think additional financing will be needed no matter what happens. I don't EVER want to see one of those "going concern" statements again, but without another financing deal of some sort, I can't see any other alternative. I just don't see how Ancor can continue to burn $2.5 million in cash per quarter and survive. Another related issue is what happens to the older gear. Let's assume that the MKII lacked some feature(s) that required an ASIC re-spin. All of a sudden, we get a whole pile of older boards that end up as scrap. (We get to pay for those, by the way.) Remember that Ancor management has told us since late last year that they were preparing for a serious ramp. That ramp hasn't happened yet for Ancor, and the technology is evolving right before our eyes. For those of you who don't follow high-technology as closely as some of the rest of us, ASIC re-spins are NOT uncommon, and Ancor's ASIC team is first-rate. The unfortunate side effect of an ASIC re-spin is that the new chip basically obsoletes the chip that it replaces. When that chip is part of a switch, the board needs to be scrapped or reworked. (Neither scenario is desirable, but is a normal part of this business.) Craig