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Friday, June 20, 2008

Market is oh so scary.

So nervous.

SOX 378 approaching quickly, the mother of all levels.

Yahoo sinks, rats stay on board

A number of other publications (allthingsd, wsj, alleyinsider) are talking about a pretty massive Yahoo exodus in search and related technologies. They're talking of a massive reorg planned -- chicken and egg here. Reorg because of the people leaving or people leaving because of the reorg? It doesn't really matter.

The ship is rudderless. Battle stations are being abandoned. There's nothing but a bunch of rats trying to get a handhold to steer.

I have to think that Yahoo will miss estimates for the quarter -- I will be amazed if with all this distraction and discussion of the deteriorating value of the Yahoo franchise that they've managed to hold together sales for the quarter.

I wonder how low the stock will go before Yahoo pukes Panama into Microsoft's outstretched hands?

Thursday, June 19, 2008

AMD could get cash infusion, go asset light and still go down

Covello at Goldman out with a piece on AMD saying the cash infusion would be dilutive though it would alleviate near-term liquidity risk, that an asset light strategy could disrupt the existing product roadmap and that the stock is pricing in far less bankruptcy risk than the bonds. The stock trades at 50* the high end of his $0.10 - 0.15 full year estimate of the company's peak earnings ability.

I don't like AMD.

Seagate could take Intel out of their SSD JV

It's well known that Intel wants to exit the NAND business. It's a drag on earnings, it's very commodity oriented.

It's also known that Seagate is looking to punch a way into the SSD business. I think this is smart. The SSD business is likely to start to encroach on the mobile HDD market in a year or two. Small form factors and low power consumption are prized traits in mobile technology. The mobile HDD market is also far more profitable than the aging desktop drive market. As such, it will become important to lay claim to emerging technologies there.

Dan Amir of Lazard, in a research note published today, postulates that Seagate may be looking to acquire Intel's interest in IMFT, the NAND JV with Micron. As I believe drive makers will need to have an SSD offering in the future, I think this would be strategically sound on Seagate's part. My guess is it'd be good for the stock too as it would remove the question of what they're planning to do. A deal for Intel's stake would likely have some guaranteed purchasing embedded within the agreement and Intel already has some design wins (Sun Micro, for example). Investors would also likely celebrate Intel's exit from NAND.

I hope he's right.

Wednesday, June 18, 2008

EMC expands use of SSD?

An article on Blocksandfiles suggests EMC is planning to offer SSD as part of the Clariion line. Possibly positive for STEC though the article (or its murky source) doesn't suggest who the supplier would be. As it stands now, STEC has the only fibre channel ready SSD drive. The article suggests the model EMC plans to offer SSD as an option on has fiber channel support, therefore I'm guessing its STEC.

I'm still long STEC. I'm long so much STEC if the stock goes up on this I'll probably make a sale because I'm choking on the goddamn thing. How's that for disclosure.

(3:09pm -- added hyperlink to article).

Creeping longer

NPD data is showing good strength... it appears builds have been decent so far in June. I want to think the soft economy and $5 gas is hurting purchasing... but it's not. It's making me think about what I wrote earlier in the year... about how the PC is probably more recession resistant than we think as it's become an indispensable household tool. In fact, I think in many cases, Google is becoming a memory substitute for people -- at least, for me it is. I don't put as much emphasis on remembering things as I have the eternal crutch of being able to look it up. When I was younger, I used to not put people's numbers in speed dial because I wouldn't remember them if I did. Now I do it without thinking about it. I'm gradually becoming the ghost in the machine, I guess. Wow, hello digression.

I can't get a good handle on corporate but I'm just not seeing much weakness. SOX 378ish I'm going to take a stand... but I'm already leaning long. Bought more NSM today. Got long INTC against an AMD short. Just plain choking on STEC here -- I can't buy anymore, already did that. Long STX, short WDC -- big historical disparity there. Think STX more likely to address the SSD market than WDC. Long a lot of NSM, not sure why it keeps coming in. Chased RIMM after buying it then selling it. AAPL I watched run 10 points (so far) without me. Long AMAT -- doesn't sell off at all when the market does.

Anyway. A bit scattered, but there it is. Want PC to slow but so far no go. Like 'em here. Hoping there's a downside cushion at 378 SOX.

Tuesday, June 17, 2008

Apple (AAPL) Mac share continues to grow

NPD released PC sales data for the month of May. Generally, it was stronger than most analysts expected, showing good growth in notebooks. The standout was Apple, which showed sales up 50% year over year -- just as they did in the prior month. Overall units for the industry were up 17.8% in May, which was a slight acceleration from the prior month.

Dell also showed strong numbers on the back of their newfound retail presence (previously they didn't sell an in-store configuration).

iPods came in slightly better and may be on track to exceed the analyst consensus of 10mm units if you just extrapolate the numbers -- I would expect those numbers to slow in June as the iPhone is fully prepared to cannibalize the iPod market in full force with a $199 price point.

Apple continues to enjoy good growth in Macs, and those drive the bottom line.

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