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 : Ampex Corporation (AEXCA) -- Ignore unavailable to you. Want to Upgrade?

To: killybegs who wrote (3225)	8/12/1998 11:25:00 PM
From: Ed Perry	Respond to of 17679

<<.indicator of future growth is the amount a company spends on R&D>> Two thoughts come to mind. One is where, somewhere I read (I believe in the Internet context) that a technology company is valued by the innovation it brings to market and not necessarily it's earning's record. This requires a focus which is fixed on the somewhat distant future. The second thought is that, since Ampex is in a transitionary stage, it is not going to be understood by the customary followers. That is, how can one value acquisition strategies? After another re-read of Bramson's July 6 letter now after the earnings release (I suggest that everyone do so again), it becomes clearer that the traditional product lines will produce only limited revenue streams and not much more for the next few quarters (as is stated). However, this letter tilts the emphasis on the future and on the long term but with nothing currently concrete or specific. Furthermore, the acquisition route has an opportunistic (not necessarily a bad thing) and a more complicated timeline. Contrasted to in house developed innovations, innovation through the stew that acquisitions would bring is much harder to manage but it can also be potentially much better. Think of all the ego's as well as the minds that are in this primordial mixture. Finally, one of the earlier postings contained an autobiographical comment by Mr. Bramson indicating how he viewed Ampex as a way of making a mark on the future. In sum, I think he want's it as is described. The implications for the common shareholders: 1) AXC will not be a stock market stock .. it will have it's own bear and bull market cycle distinct from the general market. This is primarily because it will be little understood and little followed, by analysts and by the general investing public. I would look at AXC for the near term as an investment stock. Fortunately it is sufficiently liquid but if the pace slows, AXC could come under stress as far as the AMEX is concerned. 2) I would expect more price drift in the 1 1/2 to 2 3/4 range until the acquisition results begin to throw off product announcements and measurable revenue streams. This price drift interval could play out over as much as another six to twelve months. I choose these numbers only because of a guess as to how long it would take to target an acquisition, court it and then tie the knot. 3) From the blue sky perspective of a longer term TA point of view, this would put the base build in the range of Oct 97 through June 99 or close to two years. About the right interval for a decent base build. Also enough time to wear out all but the most patient long term investment perspective holders. IMHO Ed Perry