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Technology Stocks : Silicon Graphics, Inc. (SGI) -- Ignore unavailable to you. Want to Upgrade?

To: Nandu who wrote (5320)	11/10/1998 3:35:00 PM
From: Bill Holtzman	Respond to of 14451

Anil, Thank you for contributing to this thread. I respect the fact that SGI employs some extremely bright and high achieving individuals. As for Jeff Maresh, I last heard from him in October of 1997. He and I kept in touch before then. With apologies to him, I have here an excerpt from an e-mail to me. You'll see that he found SI to have a negative influence on his investing. I believe that is why he left. Too many emotionally-charged but analytically-challenged yahoos. I had asked him for any thoughts on where he should've gotten off the SGI wagon. (This was after the earnings disaster.) Hi Bill The biggest issue I kept on bringing up on SI was marketing. I was actually beginning to think that they pulled off a "stealth" marketing campaign. But now we know they didn't. That's what worried me the most. I chalk it up for another lesson learned. There were a lot of worrysome signs - any of which seemed quite benign. Like the reorganizations, the surprise buy of Cray when they were retooling their server line, other purchases throughout the year when they should have been focusing, hiring a new ad firm in August that produced nothing visible. But I think SI impaired my judgement somewhat. However, the latest shortfall is not only SGI - IBM, SUNW, and IBM all reported weak server sales. Servers are down right now and that's not SGI's fault. It couldn't have come at a worse time. The reason why SGI was hit hardest is that their margins are so thin. As for building a marketing organization, they should have thrown out the <deleted> in April and replaced him with somebody from the big server companies to prepare the way for Origins. It bothered me that he wasn't purged with the others. They also could recruit a sales force from the other companies and make headway in the market. But based upon the erradic actions of management and resulting earnings, I think they've lost control. It's obvious top management was taken by surprise also. They bought a lot of shares at $22-26 in the past several months. The only thing that really matters to me at the conf. call is if they talk about a merger/acquisition. I think they all have good intentions, but they are out of control so I doubt they can produce meaningful and consistent results. I have nothing against Ed McCracken or a few of the other top managers. Part of the problem is that they failed to realize the magnitude of the mess that Jermoluk left. All said and done, you never make the big money unless you take the risks. Regards Jeff