CompuServe Messages

The buy recommendation for Commodore surprises me somewhat since the financial picture has not improved in a long time and the stock's been flat for a year at least. What I find staggering about the news report is the sales level of $70M for their traditionally strongest quarter. At that rate of sales, their sales are headed for ANOTHER 50% decline for fiscal 94. That will mean they've gone from a billion or so to 1/4 of a billion in just a few years. Scary. However, turnaround is obviously not impossible. I was just speaking to an executive from Unisys (remember them?). Their stock's recoved EXCELLENTLY in the past few years and probably made a lot of people wealthy. A couple of significant things about their turnaround: 1) I think they could have been classified a few years ago as an unfocused supplier of uncompetitive hardware. Now they're a solutions and consulting provider for large data processing customers like banks that still makes hardware (from PC's to mainframes). A subtle but significant shift. They seem more customer focused today. 2) They're now ISO-9000 compliant and they've become quality zealots. Commodore still suffers from quality problems and they're still unfocused. In one sense, the death of desktop Amigas will be good for them – it will focus them on interactive consumer technology. On the quality front, they just don't get it yet. They're obviously not unique in this of course, but they will have to get their act together to succeed in the long run. The competition will be relentless.