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Seagate Technology Public Limited Company Message Board

  • SailYrDrms SailYrDrms Jun 1, 2003 8:36 AM Flag

    Re: valuations? Part 2 of 2

    continued from previous post...

    "Only in the server market does STX have a substantial margin over MXO and WDC. However, IDC and others project STX losing 9% share of the server market to others over the next three quarters!"

    Do you think the market has not priced this in yet? I think the market has for awhile. STX's expected reduction of share in this market has been talked about for several months, back when all three drive companies share prices were considerably lower. The important question to ask is whether the market has priced in what happens if STX looses more or less of this market in the next 3-4 quarters than currently expected.

    "Are there any financial metrics that justify this high(low) valuation for STX(MXO & WDC)?" AND "So why is STX's market cap 60% HIGHER than the COMBINED market cap of MXO & WDC???????"

    I think I've provided some explanations above. I noticed there are other financial metrics you didn't bring up like those that deal with the financial strength of a company (current ratio, quick ratio, debt to equity, goodwill as a percentage of assets, debt as a percentage of liabilities, analysis of current assets vs current liabilities, etc). Also missing from your posts are financial metrics dealing with managament effectiveness, etc. Have you looked at those for each company?

    "Could it be the traders at the banks sponsoring the STX IPO are pumping this baby up for the next round?"

    That's a part of it imo, but there are sound reasons why STX is worth more per share than either WDC or MXO imo. And besides, I've always maintained that the higher STX's share price goes (deserved or not), the easier it is for WDC and MXO to climb. Whether anyone likes it or not and whether it is fair or not, STX is considered the most important drive company.


    Disclosure: No current positions in either STX or MXO, short WDC as of last Friday (05/30).

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