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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: Stitch who wrote (5266)	1/16/1999 9:01:00 PM
From: Sam	Read Replies (1) \| Respond to of 9256

Stitch, FWIW, I bought MTIC several times last year, believing both from what I read and from speaking with someone who worked at a large university that used a $2 million MTI system, and who believed it was at least as good for them as an EMC system would have been at half the cost, that MTI represented good value. However, I ended up selling it in Dec at a hefty loss, as I needed the loss to offset some gains I had taken earlier in the year. Must wait another week or so to buy back. I still think it represents value at these prices, although the last two reports have been subpar after a number of excellent reports, and there are some valid question about how their management is executing. Furthermore, they are up against one of the great companies in this country now, EMC. A number of months ago, when MTI was about 5 or 6 and EMC was abot 50, I somewhat pompously said on the MTI board something like I bet that MTI would be at 10 or 12 before EMC would be at 100. Wrong. EMC is now at 100, and MTI is still between 5 and 6. Clever me. Ray Noorda is Chair of the company, and owns, both personally and through a subsidiary of his that I don't entirely understand, a majority of the stock in the company. He bought more last fall at around 8 (around 100,000 shares, as I recall). Noorda does not actually run the company, though, but I would expect his experience with Novell would be invaluable (though he certainly screwed the company up in the end, both with his purchase of Word Perfect and his failure to see either Cisco or the Internet rushing into his market). The stock could easily double or more from here if they can move to the next level, revenue wise. That is, they are at an approximately $200m annual run rate now ($48-50m/Q), they need now to push that to $300. The opportunity is there, they are in some great markets, technology seems to be competitive, but their sales force doesn't seem up to the task, at least not yet. There seems to be a number of smaller companies like them (e.g., BXH, SOS to name a couple), but they haven't been able to get that killer sales instinct that EMC and other great companies somehow got. Still, it seems to me to be an interesting speculation that could pay off. However, a good deal of their actual growth in the past couple of years has come from selling DLT systems/libraries (they resell OVRL's library, I believe, although it might be another company's; in any case, it isn't their own). They need to focus on selling their own systems. They were also late by a couple of months in bringing out a FC system, though they finally got it back in Aug, I believe it was. Good luck with it. Hope it treats you better than it did me. I would consider buying it back, especially if they can start growing their system revenues again. Of course, if they announce that, the stock will probably gap up to at least 8 or 9 the next day.

To: Stitch who wrote (5266)	1/16/1999 11:02:00 PM
From: Stitch	Read Replies (5) \| Respond to of 9256

Thread, Further regarding my search for new investments I began to think about the trend towards appliances that has been much discussed on this and the PC sector thread. IDC is predicting a mecurial 96.3% CAGR for the "appliance" computing market and further stated: "Today, it's a PC world. PCs are the dominant user access device. PCs dominate IT market spending. The Intel and Microsoft "duopoly" set the IT industry standard for profit margins and market capitalization. In addition, suppliers that have hitched their wagon to the PC star in the last 17 years -- Compaq, Dell, and countless others -- have profited greatly. But the era of PC dominance may be nearing an end, as the explosive growth in users -- and uses -- of the Internet expands device requirements well beyond the design point of the general-purpose PC." Thinking about this I began to speculate on what peripheral devices might benefit from such a trend and my thoughts centralized on what I have fooled myself into believing I no9w best, specifically data storage. One thing emerges in this thinking is that flash memory should see rising demand, if in fact, we are headed to specialised, smaller, computing devices. This is likely to involve a diminution of storage capacity demand at the device level and most certainly a demand for lower cost, smaller size, and lower power dissipation. Joila! The solid state memory device sometimes called flash disk? Oui? So I quickly dialed in SanDisk on my research sites and found out what you probably already know. Everyone else has already figured this out and the stock is rapidly approaching its 12 month high, showing fantastic recovery. (I was a day or 100 late). But digging a bit deeper I have started to look at FLSHF. An interesting company and I would encourage anyone else looking at it to pipe up (please). I may take a position in SanDisk anyway, especially since I am light SEG now. Best, Stitch

To: Stitch who wrote (5266)	1/17/1999 11:38:00 PM
From: Mark Oliver	Read Replies (1) \| Respond to of 9256

I don't know anything about the RAID market, but it sounds like a fast growing sector. Then, we see that about 5 players control 90% of the market, of which the only pure player is EMC. So, you question whether it's possible to buy a second tier player who might be specialized in a way that they'll be profitable despite terrible odds. But, you didn't really build a case to say that these companies could in fact control a high profit niche. The historical view says they are in a turn around story up against a superior player EMC. It doesn't sound like they have enough product differentiation, or it's there, but I missed it. Are you asking us to talk you out of this investment? I'm not sure I see good logic in betting on the underdog. It hasn't really be a very good investment in the past. Just out of curiousity, maybe Quantum is a good play? The ATI business coupled with the their existing tape business would seem to still be a very strong opportunity with the SDLT coming on line soon. Is it logical to think they will also have a good quarter just like Seagate? When I look to new areas of investment, I think the growth of the net and the wider spread use of computers which carry lower margins must be a good case for a software play. I like some VPN/security companies. They have great margins, and great growth. I also think AT&T has shown itself to be a new company. I like their move into the business internet services. Others like Worldcom and Qwest seem to be strong players, but T's Dow position and reputation should push them over the $100 mark. I also thought you made a very good case for Zigo recently. There is a lot of chaos going on behind me, so I'm not making my point very well. I wonder if we should be saving cash for a correction rather than chasing second tier players? Regards, Mark