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Seagate Technology Public Limited Company Message Board

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    • Yeah, that "great news" really worked wonders for this POS.

      LOL...and you STUPID SHEEP bought right into it.


    • Its a sad and sordid story that would just depress me to remember.

      ReadRite was notorious at the time for its poor management, lack of quality control, and delivery issues. But, they could build stuff that AMC couldn't, and had big expense accounts to court clients with (which always works in America). If the HDD industry hadn't been so desperate for a second source, TDK/SAE could have monopolized the industry. Seagate with its own internal source failing to successfully compete against the ReadWrong legacy just shows the advantages of vertical integration in hiding how badly RHO actually was performing. Oddly, it was only a couple years ago that STX went to SAE for mobile heads after what can only be judged a failure to produce internal heads for that market.

      It's a mystery to me that HDD's have been able to survive in spite of all the wrong doing in this business.

      Every time a drive crashes, a devil gets its horns.

    • I guess now we're getting some insight into the reasons!

    • Actually, back then, nobody thought Read-Rite had the technology or the expertise required to make the gains WDC made. And the bet was WDC would have to put $1Bill into a new head fab to keep up with STX - $1Bill they didn't have.

      History turned out quite different, for whatever reasons.

      Maybe gravity has some more insight.

    • Blindsided by losng the decision is what I meant, as they seem to have been way overconfident and may still be.

      Don't disagree though with your fundamental point that, assuming the decision to be justified, they got the better of the bargain of getting ahead through theft even with a penalty of $800 million. After all, in 2004/5, they were teetering on the brink of bankruptcy and, thanks in large part to the success of the Read-Rite deal, they now are the industry leader

    • Blindsided by this? Nah. The flood, yeah. But not this.

      Go check WDC's cash balance in 2004 or 2006 (depending upon when you want to start). Over $3.5Bill now.

      WDC made significant market strides between 2005 and this past qtr - even with a deep recession in between.

      Whether there is any merit to this case, I don't know. But it amazed many market watchers back then how quickly WDC caught and passed STX in the AD race. We thought it was mostly STX being clumsy and mismanaged (probably) and/or WDC getting some help from TDK (haven't a clue). But maybe there was more to it.

      In any case, if true, it was a very well calculated strategy that paid off many times over the $525Mill that WDC may have to pay now. If false, then WDC will fight to the death.

    • And WD management surely knows a lot more to accurately size the exposure and have carefully decided to exclude any disclosure and instead convey the impression that they still think that they're going to walk from this.

      When they announce the quarter, they will have to take some sort of reserve on this decision. It will be then that they have to come cleaner.

      I think that they were totally blindsided by this which is surprising for how they are otherwise pretty careful about managing their operations and disclosure. Speaking from experience, you can never take your outside lawyer's overconfidence to the bank but maybe that's what happened here.

    • Yeah, I don't know how far back and based upon what amounts that applies to. My guess is the $525Mill reflects a cumulative penalty that added up over the years. Likewise, the associated interest. But it wasn't $525Mill from day one.

      But it may not be chump change.

    • gatrz,

      I would further note that they are even now soft pedaling their disclosure by (1) not noting that this is a lot different than an off the wall jury verdict in Texas (as I've noted in other posts) and (2} not noting that prejudgment interest at 10% from the filing of the complaint could amount to another $250 to $300 million in additional liability for a grand total of potentially $800 million.

      Maybe this is why they've been hoarding their cash for such a long time! We STX shareholders certainly now appreciate their prudence in this regard!

    • gatrz,

      In August, they knew a decision was coming; they didn't know the decision. But they were so supremely confident of the merits of their case that they chose not to foreshadow that a decision might be materially adverse beyond just simply putting the reference in the 10-k (which ofcourse does say a lot in and of itself to a practitioner of the art of disclosure).

      Such is the imperfect world of full disclosure under the federal securities laws in which obviously material adverse information (i.e. "we might be held liable for damages up to $xxx million (a known number from the arbitration proceeding of claimed damages) if we lose the arbitration") was chosen not to be disclosed.

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