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

To: Carl R. who wrote (8624)	5/21/1999 7:50:00 AM
From: valuehunter	Read Replies (1) \| Respond to of 17679

Question to anyone: I personally think the storage component of AXC is much under-appreciated with most of the talk about TVOTW, AENT, Reiter, etc. Would anyone care to present their views re: the capabilities/market of Ampex Data Sysems/MicroNet vs EMC? Thanks..................V

To: Carl R. who wrote (8624)	5/21/1999 8:07:00 AM
From: Zeev Hed	Read Replies (4) \| Respond to of 17679

Carl, and here comes the "rub", it is in essence a roulette game. Can they catch the "window of opportunity" to do an IPO and get some of that "bad" money (I was under the impression this is actually very good money for AXC) before cash resources run out. I think, by the way that your estimates of cash requirements are on the low side. If these three entities are to survive in what is becoming a very competitive environment, they will need much more cash to establish brand recognition and "control" of their respective market place. Furthermore, you must assume that AXC long term plan is not limited to these three entities, and that additional entities will be acquired, thus requiring more cash. The roulette part of the game is how long do we have a "friendly environment" for IPO's in the internuts segment and which entities are going to go to premium and which not. The premium is important since premium in the partially owned subsidiaries will reflect on AXC own share price. If successful IPO's in some of these entities are carried out, there is a hope that AXC shares will go up markedly, opening the door for AXC itself to either do a secondary, or better yet do a convertible at a premium to the then prevailing price (like $20/share or so). The downside of the roulette game is that the markets go into one of their periodic down turns closing the IPO window, and leaving AXC and its new subsidiaries in the lurch and starved for cash. Then, suddenly, the tables are reversed and the only type of financing left are the toxic type with problematic consequences. While I agree with Carl, that so far the recent financial management is conservative, basing corporate survival on friendly markets is, to say the least, dangerous, and to be more pragmatic, reckless. A strategic plan should always have a contingency for worst case scenarios. Carl, when we do those projections, we should try and look at the worst case as well. And I am not suggesting using the recent AMZN model, where they had nice QOQ growth in the top line, but their expense line grew at two to three times that rate. The worst case might be that each of the acquisitions needs an average of $4 MM per quarter burn rate just to get established and that the only source is poor sugar daddy AXC, who, as you said yourself, may have six to 12 month of cash to support its original business needs and that the markets become "unfriendly". Zeev