Zeev, interesting article in today's (9/16/02) IBD regarding DVD chip sales regarding new competition for ZRAN and ESST. MediaTek has a product that combines processing and video on one chip (used to take 2), neither ESST or ZRAN have such a product, but are working on one. (ESST expects to offer it's single chip device,Vibratto II, by the end of the year)
Towards the end of the article, IBD does offer hope for ESST and ZRAN in the DVD market. Analysts say that MediaTek doesn't have all the "rich features" that US companies offer.
Also, says IBD, expect DVD sales to be further spurred by the ramping of new recordable players which will both play DVDs and record TV programs and movies.
FWIW, in ESST's 2ndQ conference call it was the mention of MediaTek that caused a stir, and subsequent $4+ (25%) drop in ESST share price, despite a very positive earnings announcement, and 'not bad' guidance. (Two weeks later, on 8/8, ESST announced a 5MM share repurchase, and confirmed guidance and strong position in the industry.) I thought the sell off was over done, and the stock way undervalued, even if they did warn. What I didn't expect was a warning of this magnitude ... most notably the expectations for a huge 4thQ miss. (needless to say, I took another big hit from ESST. It was one of the few stocks I thought was worth holding as a longer term 'investment') IMO, the stock should have dropped further yesterday, but probably was getting large support from short covering. Last report showed an appx. 50% of float short position (not counting the 5MM buy back): 35MM in float, 17MM short. It'll be interesting to watch ESST's price performance over the next couple weeks, with an appx. total of 22MM shares (17MM short + 5MM buy back) that need to be purchased (depending on how much covering was done yesterday) .
I'm curious what your revised (assuming they are revised) expectations are for ZRAN's stock price performance both near term (next week) as well as for the next 2 - 3 months. Did you keep the shares that were 'given' to you last Thursday at the $11.50 area? If the problem is 'ESST specific', and ESST is actually losing market share to ZRAN, which some analysts believe, then this could prove to be one of the last great ZRAN buying opportunities.
As always, thanks in advance for your valuable input.
