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Technology Stocks : Adaptec (ADPT) -- Ignore unavailable to you. Want to Upgrade?

To: Doug Skrypek who wrote (4038)	11/11/1998 11:23:00 AM
From: The Philosopher	Read Replies (1) \| Respond to of 5944

I believe that the shedding of these operations is not necessarily to position the company for a sale, but to return the company to profitability. They prefer a smaller company which makes profits on a few products to an R&D factory which may have many potential future winners but is losing money today. I'm torn about the wisdom of this. I agree that they need to be profitable. But I hope they are keeping SOME development into products that will be the profit centers in 5 years. I haven't seen their latest R&D numbers or focus; that for me will be the key. Are they still spending a reasonable amount on R&D, or have they destroyed their future for short term profits? Strategically, I believe that Saviers did try to go too many directions at once, losing focus. I agree with some recentering. The question is how far it should go. I don't have an answer as to whether this TI deal is too far. (I note that they did get some licensing agreements with the deal, so in addition to shedding a money-losing operation they also got more cheap revenues, since licensing income entails minimal costs.) The problem is that I don't want Boucher to go so far as to hand over the company to a new chief exec who has nothing to do but make buggy whips and no resources to convert to making steering wheels!