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Technology Stocks : Ampex Corporation (AEXCA) -- Ignore unavailable to you. Want to Upgrade?

To: Stephen M. DeMoss who wrote (4233)	12/30/1998 11:19:00 PM
From: B. A. Marlow	Read Replies (2) \| Respond to of 17679

Love this board. You guys are great! Bought a lifetime membership in SI just so I could join the Ampex Club! Known AXC since the '50s, owned their machines, but don't own the stock (yet). In my memory, the only better brand name that's been trashed is Woolworths! But let me ask a stupid question. With its deep patent and intellectual property portfolio, can't AXC make a contribution to Internet broadcasting? Let 'em come up with something they can merchandise in conjunction with people like RNWK and BCST. Let 'em identify with something that sizzles. What about MP3? Consider, for example, the job Dolby has done with motion picture sound. That's made Dolby a household word! And that's what AXC needs to do with the Internet. The storage subsystems are fine, but how are they gonna power the stock? BAM

To: Stephen M. DeMoss who wrote (4233)	12/30/1998 11:56:00 PM
From: flickerful	Respond to of 17679

stephen.... you make two compelling points: 1.no growth 2.a dollar ain't exactly the point however, i am simply not as convinced as you that: " The volume is based on speculation that it can double from here because some analysist is making an educated guess that it can rebound." we'll know the answer soon enough, but it's a given that without a product with demonstrable need, and reasonably certain to sustain growth, we're paralyzed. i trust it's more than a few who are looking for more than a dollar here, so all i can say is that i hope you're wrong...<g>

To: Stephen M. DeMoss who wrote (4233)	12/31/1998 12:06:00 AM
From: Gus	Read Replies (3) \| Respond to of 17679

Good post, Steve. During the last few weeks, Ampex has popped up on all kinds of screens using growth flow ratios, PEGs, PEs, etc but as you pointed out when there is no sales growth the demand for the common goes down, way down. Exhibit A: AXC. That is why I continue to be disappointed at the way Bramson has handled the 19mm business. While he has succeeded in bringing down the manufacturing break-even point of the 19mm biz (DCRsi/DIS/DST) to the point where it CAN be a wildly profitable high-margin business at the $100-$120 million sales level even if it caters only to the Federal government, the military-industrial complex, NATO and several other niche markets -- the world's largest storage hogs with the largest budgets -- he has been unable to make the topline outgrow the long-anticipated decline in video revenues. I understand the great effort and expense that AXC has exerted -- as evidenced by all those highly specialized defense-oriented trade shows they go to -- over the years, but the lack of consistent sales growth leads me to believe that AXC simply has to do a more pragmatic job of making its case known to the powers-that-be who are mightily concerned with the way Wall Street's system of rewards and punishment has resulted in the hollowing of America's manufacturing base. Realistically, a business dependent on government contracts will always struggle to earn a growth multiple, but the important thing is the cash flow. And I believe that requires Bramson to open up his board to ex-military types who can help Ampex make that case that the company that invented the VCR and the number one supplier of high-performance data recorders would really appreciate it if its number one customer for data recorders would use its national security overrides to help it win data storage contracts in the federal government that it would not otherwise win NOT for lack of a solid, competitive product but for lack of a stronger balance sheet which, if I understand the kind of TCO (total cost of ownership) analysis that big iron requires in the public and private sectors, is what prevents Ampex from competing with the likes of IBM, Storagetek EMC and even Sony (EMC is packaging Sony's 12/24 MB/sec DTF libraries as part of Symmetrix) for those heavy-duty backup storage contracts. Why would any company or government office entrust its priceless data to a company with a weak balance sheet that is selling a proprietary, single-sourced tape drive/library when it can go to IBM or Storagetek? All Bramson has to do is look at the way the military used the prospects of contracts (or lack thereof) to orchestrate the consolidation of the defense industry into Boeing, Lockheed, Raytheon and a host of small to medium-sized contractors to appreciate the powers of persuasion of the Pentagon. As an additional reference, he can look at the way DRS and APSG have used ex-Pentagon savvy to help fatten their order books. As some others have mentioned, the Ampex board is basically Bramson and his cronies. Financial types. What we basically have here is a board with a narrow and specialized background that was extremely useful when Bramson was maneuvering the company around the landmines of bankruptcy. But times have changed. Ampex is no longer on the pink sheets. The KM program has been shelved. And David is still smarting from the whooping that the Japanese Goliath gave him over the Lemoine patent. But AXC has the great equalizer of the internet now. If, in addition to adding the ex-military types to the board, Bramson also adds some Silicon Valley venture capital types to the board, he would be in a better position to tap into the technology network that rules the Valley. The pre-Gerstner IBM, the Sculley Apple, and the McNealy SUN represent a losing strategy, one biased towards the NOT-INVENTED-HERE mentality. All the successful technology companies today like Intel, Microsoft, EMC and Cisco have fostered a corporate culture that rewards innovation, but also rewards the pragmatic ability to absorb technology from the outside. It's a pity if Bramson uses his Safeguard Scientifics - like holding company structure to encourage a culture that has to invent the technology or own the technology, and consequently sacrifice time-to-market, before it can go after genuine growth opportunities like the internet. Can one ever be fashionably late to a land rush? Even with a Bentley? Quoting Kipling, the strenght of the wolf is in the pack. The strenght of the Ampex internet wolf will necessarily have to be in the pack-age of video-related solutions it can offer to the corporate and consumer market over the internet. A play really on the interrelated trends of OUTSOURCING and the increased complexity due to Moore's Law forcing companies to pay premiums for solutions to manage complexity. One interesting factoid I'm still trying to crosscheck is this. 40% of capital spending in the 90s can be attributed to Information Technology. 40% of that IT-related spending can be further attributed to systems integration. Does AXC really have to OWN or CONTROL all the components of whatever video-related solutions it has in store for us? Some of us don't think so. If Bramson thinks so then I'm afraid AXC will end up like a mouse that will eventually be forced to scurry out of the ASE. Time to market, Bramson, time to market. Tick tock tick tock...... Happy New Year.