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

To: Mark Oliver who wrote (8729)	4/29/1999 11:05:00 PM
From: TechMeister	Respond to of 9124

Mark: I hope you know what tracking stock means. It means you can invest in DLT alone, not having to worry about the price-wars and cow-boys in the el-cheapo disk drive arena. That means a lot to me. The tracking stock also means, the DD business can no longer rely on the cushy profits from their tape brethren. It means they have to become effecient, make money. I think thats the best QNTM management can do for the company. Once the DD business is seperated from DLT, they will find the ways and means to become prfotable. QNTM already announced that the High end DD business is scheduled to be profitable in 2H 99. That itself means the HDD business will generate about $40 million in profit per quarter when that happens. On a share base of 85 million, thats close to 50 cents EPS. Irrespective of what happens to the DD business, DLT ought to be valued around $20 atleast. The DD business around may be $10, for being a dog. That adds upto $25 share value. ( 1QNTM = 1QDLT + 0.5QHDD). FROm the current level of $17, you are talking 40% appreciation just waiting to be unlocked. But believe me, the institutions will start singing the DLT tune once they are done accumulating the stock. Once thats done, guess who gets taken for a ride? The small investor. Been there done that.

To: Mark Oliver who wrote (8729)	4/30/1999 12:41:00 AM
From: Henry W Singor	Read Replies (1) \| Respond to of 9124

Mark. I don't think that they have completed their repurchase of stock but it also doesn't seem to me that they are very interested in repurchasing stock. From the most recent financials and conference call it seems that they are more interested in using the cash to expand the scope of their business. I think someone has talked about it already but last quarter was a pretty sensational quarter when you backed out some of the Engineering, SG&A and marketing expenses that were related to the production ramp of Atlas 10k, Atlas 4 and some of the other programs that they are launching. Qntm is becoming much more aggressive on the new product front. Also be patient with DLT. In the two cases that I cited previously it wasn't until the fast growing division was obviously the growth engine that Wall Street took notice. I think that should sink in to their heads soon, since DLT at 30% of revenue and with a 25% growth rate should start making a serious contribution to the top line growth of the combined company. I share your concern about the tracking stock not completely isolating the HDD and DLT businesses but I think that the HDD business should at least hold it's own considering QNTM's reputation for quality and also their early lead at Tivo and Replay and their close relationship with Panasonic (Their DD manufacturing partner in a round about way). Everything looks up from here. That is the only good thing that can be said about hitting bottom. The only way left to go is up. Hold this one for the long term, wait for an absolutely insane valuation like 100 times sales. Henry