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AST Research Inc. and Advanced Logic Research Inc., two OC-based makers of personal computers, are beginning to show the wear and tear of the vicious computer price wars, with their stocks skidding to new lows for the year.
Both companies have been responding to the charged pricing environment by tightening cost controls and slashing their own prices. Meanwhile, key executives have left both companies while financial results also appear to be weakening.
"AST and ALR are worried," a source with an OC computer firm who asked not to be named said. "Compaq and IBM had a scare. They were laying people off and so on, and meanwhile AST and ALR were chipping away at their market share. They finally cut prices and came after them. Now the companies that were nipping at their heels are in trouble. And that spells trouble for our Orange County computer makers."
Last week both AST and ALR hit 52-week lows, with AST trading as low as 11-1/4 vs. a high for the year of 32-1/4, while ALR dropped to 4-1/2, compared to its high of 15.
Compaq Computers, the Houston computer giant, fired the first shot in the latest price-cutting battle this spring when it slashed prices...