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Technology Stocks : Seagate Technology - Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Stitch who wrote (6)	11/8/1998 6:10:00 AM
From: accountclosed	Read Replies (2) \| Respond to of 1989

I want to be sure that this next remark has this context: You guys are really excellent scientists. You know the issues of the DD business in terms of the engineering, the business relationships, the speed of technological change. You have an eye on the horizon and on market conditions both in the business and in the world economy. However...It isn't clear to me that Luczo would view this as a DD company. You are looking at a 7 Billion market cap. The VRTS stake is valued at 1.6 billion. The possible killer app in Dragon. A nearly 2 billion dollar cash hoard. These three sections of SEG add up to a big chunk of the market cap. Luczo is a Wall Street guy. It is plain that Wall Street values software companies at a different order of magnitude than Disk Drive companies. I don't say that SEG DD business is totally a commodity business, but to many on Wall Street the ears shut pretty fast and that label gets applied. The multiples that software companies command certainly isn't lost on Luczo. We could just as easily have this thread these days in the Software part of SI. "Oh yeah and by the way, they have a manufacturing division." All that said, I have beliefs in the DD business at SEG. Fibre channel commitment, Optical research at Quinta division, the cycle will turn, strong financial position to weather the storm, focus on time to market, etc. So in no way would I ever discourage the excellent technical discussion of the DD business. This area is blessed. If you travel SI, many threads are barren of technological expertise. The debate is at a level of "I'm bullish" and that's it. When the subject is RDRT, we have a pretty sharply focused company. When the subject is QNTM, a little broader with the Tape business, but nonetheless fairly easily defined. But when the subject is SEG, we have a very interesting company indeed. And we just can't lose sight of the diversity of businesses and the extreme contrasts in potential Wall Street valuation models for those diverse businesses.