mjsagar@sandia.gov (9123 SAGARTZ, MATHIAS J.) (08/08/89)
Lately the stock market has been treating the companies heavy into PC's very badly. Apple and Compaq have been pounded really hard, but nothing like Commodore. Irving Gould has admitted that there will be a loss in the April-June quarter. He claims that it's mostly the fault of the strong dollar making European sales results look bad. The party line is pretty much unchanged, PC clones doing well and the Amiga making progress in the business sector. Wall Street's reply has taken the stock price from over 19 to 10.25. Now the market values Commodore at about 1/3 annual sales and about 6 times annual earnings. These numbers are not those of a company that the financial markets have any faith in. The real question is, are things really that bad? Markets are notorious for over reacting but sometimes they know somethings the general public doesn't.
451061@UOTTAWA.BITNET (Valentin Pepelea) (08/09/89)
"9123 SAGARTZ, MATHIAS J." <mjsagar@sandia.gov> writes in Message-ID: <21219@louie.udel.EDU> > Wall Street's reply has taken the stock price from over 19 to 10.25. > Now the market values Commodore at about 1/3 annual sales and about > 6 times annual earnings. These numbers are not those of a > company that the financial markets have any faith in. The real question > is, are things really that bad? Markets are notorious for over > reacting but sometimes they know somethings the general public > doesn't. Definitely not. The $19 figure was exegerrated, due very much to the expectancy of CBM introducment of new technology, and the continued growth in sales. The rise in DRAM prices though had an interesting psychological effect. Computer prices were not dropping any more; therefore consummers would not get the periodic imression that suddently they would get a real bargain... an effect one gets every 6 months when prices fall by 15%. Thus, no more compulsive buying from the public. And unfortunately CBM is affected even more so since most of its clients are individuals with small wallets. But you will notice that trends have continued despite the current slowdown. My prediction is watch out for this winter. CBM top management has finally seen the light. R&D money apparently is going up, and the $14 MegaBuck advertizing budget will satisfy us all. I predict CBM's stock to hit twenty in February. Valentin _________________________________________________________________________ The godess of democracy? "The Name: Valentin Pepelea tyrants may destroy a statue, Phonet: (613) 231-7476 but they cannot kill a god." Bitnet: 451061@Uottawa.bitnet Usenet: Use cunyvm.cuny.edu gate - Confucius Planet: 451061@acadvm1.UOttawa.CA
daveh@cbmvax.UUCP (Dave Haynie) (08/09/89)
in article <21219@louie.udel.EDU>, mjsagar@sandia.gov (9123 SAGARTZ, MATHIAS J.) says: > Wall Street's reply has taken the stock price from over 19 to 10.25. > These numbers are not those of a company that the financial markets have > any faith in. The real question is, are things really that bad? I'm no financial analyst, but I think this is a typical case of Wall Street over-reaction. I've been with Commodore for a long time, and as a result I've seen this kind of thing over and over again, and in most cases it's been rather meaningless. I haven't followed the market on other stocks, but if it's purely a reaction to the beating Commodore took over the last quarter, rather than the over-reaction that seems typical, you'd expect other companies who've been similarly beaten (last quarter wasn't much good for anyone in the computer business) to have similar stock changes. For instance, what happened to Sun -- they apparently had a Real Bad Quarter. -- Dave Haynie Commodore-Amiga (Systems Engineering) "The Crew That Never Rests" {uunet|pyramid|rutgers}!cbmvax!daveh PLINK: D-DAVE H BIX: hazy Be careful what you wish for -- you just might get it
kurt@tc.fluke.COM (Kurt Guntheroth) (08/10/89)
Don't forget CBM's close encounter with bankruptcy just a couple years ago. Investors still consider CBM a highly speculative stock, and the slightest whiff of bad news is going to hit the stock very hard. They are clawing for market share, and that means not raising their prices in Europe as the dollar goes up. That means eating higher DRAM costs. That means cutting profits thin even in good times. The stock market may be valuing CBM fairly, though I suspect there is more potential gain than loss. Investors are just not going to risk all that much on CBM.
CIS@S41.Prime.COM (08/15/89)
As with all 'high-tech' stocks, the brokers and traders really have no idea
how a computer company should be run in order to maintain long-term maximum
health. Because of the recent spate of mergers, acquisitions and leveraged
buy-outs, even in the computer industry (:-( [see .sig below for reason for
large frown], managers and brokers are ever more concerned with the quarterly
or yearly results, and not with the long-term prospects. Another reason for
irrationality of stock prices in the computing industry is because of the
perception on Wall Street that the industry is now 'mature'. This means that
they expect the Suns and Apples, and yes, the Commodores too, to behave like
US Steel/Ford/Standard Oil of Ohio- that is, have steady growth rates, pay
out dividends, have a firmly entrenched board of directors and set of
managers, etc. Everyone who is in the business, though, knows that they are
totally wrong in their assumptions about the industry. Computing is driven
by changes in technology. It's more than just a better and more efficient
process for making the boxes that adds value to the industry. It's the
boxes/chips that add value to the industry by making its customers more
productive.
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Chuck Stern "Keep your feet on the ground, keep reaching for
Prime Computer, Inc. the sky, pray for rain, keep the humor dry and
500 Old Connecticut Path keep eating those Powdermilk Biscuits"
Framingham, MA 01701
cis@s41.Prime.COM
/* I do not claim to even KNOW who speaks for Prime, much less claiming that
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