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 : Adaptec (ADPT) -- Ignore unavailable to you. Want to Upgrade?

To: Bungee who wrote (3131)	7/24/1998 6:04:00 AM
From: Pawel Achtel	Respond to of 5944

Hello Everyone! I have been following this thread for about a year now and decided to contribute my rather general view. It does not contain information that we do not know, but rather summarizes some facts that I think are important. Here is what I think: 1.ADPT is well recognized and well covered by analysts. This ensures it's liquidity. The average daily volume would indicate it is a popular stock. It is important if one want's to own the stock. I found it frustrating trading ODIS in and out with a volume of 1000 shares in the first trading hour. 2. I don't need to point out the obvious: it is currently trading at the levels making it arguably the biggest bargain on NASDAQ. It is currently valued as if it was going broke next Q or at least being not profitable for the next 18 months. It is like buying DELL for $8 after a couple of bad (but not disastrous) quarters - would you buy DELL at $8 if they disappointed a couple of times? 3. The future path (and expectations) are clear. The company keeps developing new attractive products that are at the cutting edge of technology. Many companies that do that are far from being profitable at all. ADPT still is. So the fundamentals are still good. The management is fully aware of the problems and is working hard towards solving them. They have disclosed what they are going to do to improve the profitability and the steps look quite reasonable to me. The stock price however would indicate as if market would disapprove the proposed actions. 4. I would probably give trust to the rumors of $20-$22 Intel offer that was rejected. The asking price was around twice that according to the rumors. I remember DEC was in similar position about a year ago trading at adjusted PE of 3 or 4. I loaded up at $35, $33 and $28. And I loaded real big as institutions were dumping this pup. I did not get the very bottom, but close enough. Well, DEC went so cheap that CPQ snapped it with a "pocket change" giving me a nice 100% return. Then, everyone was surprised how cheaply CPQ purchased DEC - only 100% more than I paid for it 8-). I can see not much of a difference in the pattern that ADPT is trading now except, the management (not as bad as some think) decided to ask a reasonable price. $22 did not sound reasonable. I am not surprised by that. 5. The reason ADPT is so cheap appears to be simple too. ADPT was and still is mostly owned by institutions. When they exit out you know what happens: The opposite when they want to buy it. 8-) Saying that, I do not care if I don't get the absolute bottom today. It may later go down to $10 (although I doubt). I may average down and just wait. May first exit point will certainly be higher then INTC offered. $12 5/16 in Germany sounds good AFTER we know what to expect for the next 2Qs. I view it better than $11 7/8 before the CC and earnings release. I am placing another buy order... Cheers, Pawel