Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Bob Strickland who wrote (34601)	7/22/1998 2:31:00 PM
From: William T. Katz	Read Replies (1) \| Respond to of 50808

Lots of reasons this stock is trading near its all-year low: 1) Semis out of favor. The entire sector is lumped together and you can see that all semis are hurting right now. This includes those sectors that supply the semis (semi-equip makers and testers). 2) Fears of Asia. CUBE was reliant on Chinese market for VCD. They have asian exposure. Also add in the uncertainty about the new VCD specs. 3) Competition. Competition for MPEG-2/AC-3 decoders, VCD, and headend encoders, etc. These three are pretty big concerns. The question is what you think happens from now: 1) Semis won't always be out of favor. This sector is cyclical. Supply outstrips demand + Asian contagion will lead to Demand outstripping Supply as production decreases. 2) Asia is bad, but China looking good. Asia still might get worse but China is an island onto itself. Also, there is some pretty good reasons to believe any future Chinese spec can be rapidly accomodated by CUBE. 3) The digital video market will skyrocket over the next decade. We are at the very beginning stages. DVD has not achieved breakout yet, but it might well do this in xmas when players get cheaper and DVD-ROM is routinely used with Windows 98. Digital TV is mandated in the future and that will be absolutely huge market. Sure there is competition, but this pie will be incredible huge. Magnificently huge. Plenty of room for all the fishes with many of the fishes getting fat. CUBE now gets over 60% revenue from a digital video networking market. That market is growing quickly. Should CUBE be lumped with the semis and not CISCO?