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

To: Fang Li who wrote (18253)	9/27/1998 11:33:00 AM
From: iceburg	Read Replies (1) \| Respond to of 29386

Fanr, You observed: Now the Street and investors have lost interest, very small group of people like us long losers are still hanging around, the company has to reestablish the credibility with the Wall Street and investors. Correct. Wall street fell for the story once, Hucom and Sequent led to imaginations running wild on how much more was coming. The difference between now and then is that FC was a niche market then. FC is no longer a niche technology. Wall street will give ANCR the credit we hope for when announcements like Thursday's start rolling in with some frequency. I fully expect that will happen now FC alliances will be like giddy kids picking players for a football game. Lot's of folks in a hurry to get the game started... Steve

To: Fang Li who wrote (18253)	9/27/1998 3:38:00 PM
From: Greg Hull	Read Replies (1) \| Respond to of 29386

Fang Li, <Kerry, Would the stock be priced at $10 instead of $2, if this news come 3 months earlier? >> I been thinking about this issue, too. We are all glad that Ancor landed this funding. It probably doesn't make much difference to the company whether it was closed in July or September (maybe it was closed earlier and not announced until last week?), but it does make a lot of difference to the common stock holders. The potential dilution from conversion of preferred stock is several to many millions of shares greater because the stock wallowed in the $1 range for a couple months. Even if the stock continues its nice rise of Friday, we will be feeling the effects of excessive dilution for most of October (and possibly longer). This flood on the supply side will damp the benefit of a heavy demand caused by a major OEM announcement. Had the good news of 9/24/98 come on 6/24/98, or even 7/24/98, I think we would have had a bigger dollar rise the next trading day than we did last Friday. There was no way to characterize the news as bad in any way, yet less than $1 rise on huge volume. As George pointed out, we had one of our biggest trading days ever. We need to have millions of shares sopped up before we enter steady state market conditions. I don't know if the preferred shareholders can drive the price back below $1.50 again, however it does seem likely that they would try to drive prices down (by selling or short selling) for a few days before a planned Series C conversion date. It would be interesting to know if they set conversion dates in advance, or only respond to current market conditions. I hope Ancor will have no further need for a convertible preferred offering, and am glad they pursued this non-dilutive form of financing. I'd rather quibble about when this financing was secured than hear of another convertible offering. Greg

To: Fang Li who wrote (18253)	9/27/1998 8:38:00 PM
From: Craig Stevenson	Read Replies (1) \| Respond to of 29386

Fang Li, <<It is still bothering me that the $11 million Ancor got recently were not from MK II, why did Ancor decide to quit Lan and put their eggs in one basket?>> On the contrary, this $11 Million IS from MKII. Not the switches themselves, but from the technology that goes into them. That is what is important. It was MKII technology that won this deal. Craig

To: Fang Li who wrote (18253)	9/28/1998 2:14:00 AM
From: Kerry Lee	Read Replies (1) \| Respond to of 29386

<< Kerry, Would the stock be priced at $10 instead of $2, if this news come 3 months earlier?>> Not likely. << Now the Street and investors have lost interest, very small group of people like us long losers are still hanging around, the company has to reestablish the credibility with the Wall Street and investors. With a large number of converted shares into floating, the price will move a lot slower. Maybe only a longer term deal can help.>> Agree that ANCR has to regain credibility. This INRANGE deal was Step 1 in terms of improving Ancor's balance sheet and validation of its technology and seemed to be enough for Kinnard to upgrade their outlook/rating. Step 2 is obviously a large OEM customer. I remain optimistic on Step 2. Disagree that the Street has lost interest. It is true that "once bitten twice shy" applies to existing/old/ retail investors/brokerages like Kinnard and other Mpls firms. My understanding is that there is New Money sitting on the sidelines and waiting to see a major OEM before jumping in.A significant OEM will put Ancor on the map with Wall St. Look at what the SQNT deal did for ANCR stock price 2 1/2 years ago and SQNT is really just a Tier 3 player. As far as number of shares outstanding, I pay more attention to the forward-looking revenue models and total market cap potential. A large number of shares outstanding does not slow down volatility in either direction, eg. AFCI.I will agree that a return to $40 levels is highly unlikely in 1998/99 and that is a function of both Small Cap Bear Market as well as doubling the number of ANCR shares versus 1996. Also, don't discount the prospect of buy-out within 2 years. Who would have predicted that Texas Instruments would pay $400 million cash for AMTX which had almost no cash left and never had annual revenues over $15 million? FWIW, Ancor employees received stock options about 2 months ago with an exercise price around $5-6 whereas the bulk of Ancor CEO's options are exercisable at $9-10. << It is still bothering me that the $11 million Ancor got recently were not from MK II, why did Ancor decide to quit Lan and put their eggs in one basket? >> Ancor pursued the LAN strategy/market for several years with minimal success and the emergence of Gigabit Ethernet which was the nail in the coffin for FC in the LAN. Ancor IS still pursuing LAN business that does NOT require systems integration work. Do not forget that Ancor's Class 1/LAN-centric strategy is what gave Brocade a 6-12 month headstart in the Storage ( OEM/SAN )market with a Class 2/3 Gig speed switch which resulted in OEM wins at SQNT,McData/EMC, DEC and STK. Ancor never really had a chance with Sun due to the family ties with Brocade which probably also has the inside track at others like Data General due to the salesforce advantage( relationships) built prior to Paul Pasqua's arrival. As far as the "lack of MKII revenues", I believe that this is a function of the Fibre Channel Market still evolving and the OEM's and systems integrators still in the process of finalizing standards and defining their needs ( arbitrated loop private vs public loop, interoperability, management software, etc..). PS - Fang Li, IF you were a Brocade shareholder now, 1) would you be happy ( why and why not? ) and 2) do you think you are looking at more dilution ( equity infusion ?)in the absence of the aborted 1998 IPO?