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What do people out there who are knowledgeable about data storage
think about this?
QUESTION:When Exabyte, which makes digital tape for storing computer data,
was being touted a few months ago as a hot stock, someone here posted a
recommendation for Legacy Storage Systems, Inc., which is listed on the
Alberta Stock Exchange but will soon have a Toronto Stock Exchange
listing. Today's *Globe and Mail* (a leading Canadian paper, for those of
you who don't know) has an article touting Leg's prospects on the grounds
that it is a leader in 12-mm data storage technology and 12-mm tape has an
excellent chance of becoming an industry standard (20-mm tape is too far
off in the future, the article says).
What do people out there who are knowledgeable about data storage
think about this? Who are the main players in this micro-industry, and is
it a good place to seek profits?
ANSWER: I've followed Legacy for a year now and have been in and out of the
stock. I now am currently in. Legacy's current run-up is due to a number
of factors.
1. Legacy has approval to list on the Toronto Stock Exchange. This gives
the stock the credibility it deserves, and gives it exposure to
institutional investors in Canada and the US.
2. Legacy has recently purchased Rexon Inc. in the US. Rexon was in
Chapter 11 bankruptcy and was an agreeable party to Legacy's purchase.
Rexon just completed a reorigization and according to news articles
simply ran out of cash. They are purported to be an excellent company
with excellent prospects that fit nicely with Legacy. This also gives
Legacy an instant US manufacturing and distribution infrastructure for
their Quasermetrics VAST 12mm tape storage system.
3. The Quasermetrics VAST 12mm tape storage technology is, as far as I
know, the leader in the amount of data storage per tape which is 50GB.
From what I know, their system is expandable from one to 32 drives for a
total storage capacity of up to 1600GB of data. (Don't quote me on this
but I think this is correct). They currently have prototypes in the field
and are gearing up for full production in '96.
So all this added together seems to put Legacy in a position for a great
future. Clearly all this has to show up in the bottom line vis-a-vis
earning per share. With the buyout of Rexon, it was reported that Legacy
is now one of the top 10 computer peripheral companies in Canada. This
alone seems to make Legacy's current price share appear low. The recent
runup in stock price seems to be confirming this. Legacy has passed it
previous high of $3.40 so who knows where the upside is. Hopefully it is
much higher. I personally highly recommend the stock.
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