While the company has seen no negative trend in its bookings activity, the Nortel remarks suggest a downturn is inevitable, although probably not until the first quarter of 2001. Unfortunately, stocks selling at more than 100 times multiples don't fare well in the face of any negative trend.
More Quotes from Drew Peck:
But ironically, this is going to turn the shortage into a surplus in a very short period of time. This problem has also been masked by seasonal demand for processors, which is very strong at this time of the year.Drew Peck
A lot is going to hinge on how much credibility there is in the comments ... that the microprocessor business has stabilized.
Drew Peck
The PC business looks like it's going to be struggling for most of next year. If you look a little bit outside the PC world and look at some of the things that are going on in the consumer and industrial sectors, looks to me like there is going to be a nice rebound coming.
Drew Peck
Meanwhile, that's been in the midst of reasonably stable pricing in the processor business and I think that the stable pricing is about to come to an end. By the end of this year, we're going to see sharply eroding prices as we get into the first half of next year.
Drew Peck
Obviously, this company is having big problems. It's cash flow negative. They are now at the point where they are selling off pieces of their business to subsidize the remaining piece. All their eggs are in one basket.
Drew Peck
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