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Technology Stocks : Phoenix Technologies (PTEC) -- Ignore unavailable to you. Want to Upgrade?

To: Jules B. Garfunkel who wrote (2839)	10/23/1998 12:33:00 PM
From: Rambi	Respond to of 3624

Fri Oct 23 PTEC Phoenix Technologies downgraded by Needham & Co - Briefing.com Hi Jules, This is the most discouraging stock I own next to the BTGI you were horrified I had bought. (Yes-you were right). Oh and TAVA- (you said sell- you were right) As a non-techie, I still feel that until PTEC can make itself somehow accessible and comprehensible to the public, or else SHOW some convincing profits-present and future- it will remain unnoticed. It needs some sex appeal! Your post is the first in a while that I was able to think--oh ok-- there still IS a plan. Thanks. penni

To: Jules B. Garfunkel who wrote (2839)	10/23/1998 12:40:00 PM
From: Tim Oliver	Read Replies (1) \| Respond to of 3624

Jules, I'm surprised by the strength in PTEC stock today. One of their analysts just downgraded the stock, yet it hasn't suffered much at all yet. I'm sometimes sarcastic, but unfortunately I was very serious in my last post about what appears to be a dying BIOS business. I still think that 70-80% of their business shouldn't be in BIOS and that they need to make some non-BIOS investments. If they still haven't captured Compaq's commercial division BIOS after all this time, they obviously don't have something that OEMs really find attractive AND are willing to pay for.

To: Jules B. Garfunkel who wrote (2839)	10/23/1998 12:41:00 PM
From: Mark Brophy	Read Replies (1) \| Respond to of 3624

That's an unrealistic expectation. He stated that pricing for BIOSs, he hoped, would firm as a result of the expansion into the Server Market. (I interpreted this to mean Intel's Xeon product). Xeon is a good product for Intel, but not for Phoenix. The software engineering will be be minimal. Jack Kay was referring to Merced, not Xeon. He went on to say that he hoped to get much higher numbers as we moved on, (in the three digits range for the Merced systems in the 2001 time frame). I guessed $3-10 because notebook unit royalty is $3 and Merced will be more complicated and new. But, bear in mind that Merced will ramp much more slowly than the typical Intel processor generation. It's not even clear that it will be successful, so I don't consider it worth building into a financial model.

To: Jules B. Garfunkel who wrote (2839)	10/24/1998 8:21:00 AM
From: Fred Fahmy	Read Replies (3) \| Respond to of 3624

Jules, Just listened to the CC. Your very appropriate question gets to the heart of one of my key concerns....pricing. Thanks for asking the question. Jack mentioned that your follow up question got into "account management" and he didn't want to publicly address the question which was essentially "have customers said if you don't give us our price we will go elsewhere". This is exactly what I have been asking myself. So, did he shed more light on this when you spoke to him personally. Does PTEC really have virtually 0 leverage in pricing? I find this extremely strange. Sure they're "not a monopoly", but they do have a very high market share and they aren't selling toilet paper. It seems that in your private conversation he implied to you that ASP's might firm as a result of mix...but this still doesn't address the question of pricing leverage for an individual product/customer. So here again, I am left with a concern regarding business/product management (as opposed to products and marketing position which I continue to think are excellent). I was very happy to hear Jack say that he was tired of under achieving expectations and I think he might be getting the picture that it is prudent to be conservative, especially with global uncertainties continuing. These are what continue to be my primary concerns: 1) PTEC is not getting a fair value for their product. Jack said that OEMS margins are getting squeezed and that this puts pressure on them. Perhaps this is true at CPQ and IBM (I don't know because I don't follow their financials in that great of detail), but the big direct vendors such DELL and GTW are actually reporting increasing margins during these difficult competitive times. I think part of their gains are coming at our expense. 2) This company has virtually 0 visibility in the investment community. They need to be proactive in stirring up interest including the analysts. The length of the CC Q&A session and the number of questions was very telling. 3) Management still has a credibility problem but I think I heard signs that they realize this, and therefore the are probably now leaning towards conservative guidance. 4) No buyback intentions made public. Leaving any prospective (and current for that matter) investor scratching his head wondering are they waiting for a significantly lower price???...and, therefore, should I wait too? Now the positives as I see them: 1) Excellent products in critical fields which will only become more relevant with time. 2) Strong balance sheet and financials. 3) Strategic acquisitions which seem like a perfect fit and appear to be integrating nicely already. One stop shopping is a key plus and I liked the example Jack used of the set top box customer. 4) High market share which should eventually lead to some degree of price firming. Oh well, let's hope that the DOJ's concerns end up being legitimate <ggg>. It seems to me that they understand the implications of the PTEC/AWRD merger better than the investment community. Good luck to all, FF