Kodak technical tragedy will repeat: avoid the gem technology risk

SSE Investor Education Center The main body of the gem is High-tech Enterprises, technology advantage is the basis for the survival and development of most High-tech enterprises.　　Therefore, technical backwardness, technology research and development or market failure has become High-tech enterprises in the heart of the "nightmare." Kodak's tragic Kodak almost become synonymous with technical tragedy. The once brilliant, once near-monopoly of the global film market, fell sharply as the digital age came and the market shrank and its performance plunged (see chart 1). In April 2004, Kodak was removed from the Dow Jones 30 industrial Stock Average price index component stocks, and it entered the constituent stocks for 1930 years. Kodak Annual report Data 1999 2008 revenue 14 billion USD 9.4 billion USD net profit 1.39 billion USD-440 million USD Kodak's real tragedy is that its fall is almost as inevitable as fate. Although some experts said that Kodak failed to transform in time, leading to the company did not embark on the digital age of the beat. But the problem is that even if Kodak can predict the future, it cannot change the inevitability of falling from a monopolistic position.　　Because digital imaging and film in a very different technology, in the digital camera competitive market, Kodak is no longer likely to act as the industry leader role. Kodak's ups and downs are very typical, for some High-tech enterprises, the biggest risk, sometimes not from the industry itself, but from alternative technology. The impact of alternative technology on the original market is likely to be subversive, which is not a competitive relationship, but a "dynastic succession."　　Once encountered such a risk, the enterprise's efforts, struggle, in the irreversible "fate" before, will appear powerless. Pfizer's nightmare. High-tech enterprises usually win with new products, and build new products on the basis of new scientific research results and new technology applications, in the middle of process technology research, product trial, intermediate test and expansion of production stage, each stage has the possibility of failure.　　Even after the new product is listed, it may be due to quality and other reasons, suffered a major setback. For example, Pfizer, the global pharmaceutical giant, has been the leader in new drug development. March 1998, the company after a long-term trial of new drugs viagra (viagra) listed, and then swept the world, to August 2000 has sold 300 million pieces of blue pills.　　The company's share price reached its all-time peak during this period. But since then, Pfizer's new drug development has rarely been a big success for Viagra. Instead, a string of defeats has frustrated investors ' expectations of Pfizer. As in December 2006, Pfizer announced that it had invested heavily in the development of a key drug--torcetrapib that raised the level of "good cholesterol" in the body, and that the company would give up the drug if it failed in a large-scale clinical trial.　　Pfizer's shares fell 11% on the day the news was announced. The company is also expected to succeed in the market, which is likely to surpass Viagra, a smoking-cessation drug, which, despite being approved for listing in May 2006, has been accepted by a number of people eager to quit., a barrage of bad news came. Some cases have shown that it is possible to trigger psychiatric disorders, which can cause severe problems such as depression and even suicide. Some authorities began to warn patients to use the drug carefully.　　The sales of the planet have been greatly slippery, and Pfizer's share price has fallen. Close to 18 months of closure from the above examples, it can be seen that, for High-tech enterprises, the technical risk is almost endless around. Even the successful enterprises, are always facing a major test. Compared with ordinary manufacturing, or other technology relatively mature and stable industries, High-tech enterprises are facing greater uncertainty and unpredictability.　　Because of this, Microsoft has been saying: "We are only 18 months from the closure." Microsoft's stance certainly has a sense of alertness, as the company has been holding huge sums of cash.　　By the end of 2008, the company's cash holdings and short-term investments amounted to $20.7 billion trillion, and the goal was to be ready to invest in research and development or acquisitions to avoid contingencies. More worthy of the attention of investors is that the above mentioned technical risk examples, most of the industry giants, its rich, technical reserves, many SMEs are difficult to compare.　　For small and medium-sized enterprises in the gem, if there is a major technical risk, whether there is the strength to have time to survive the winter another way out, is a big unknown.　　From the Nasdaq situation, some small and medium-sized enterprises, no huge cash reserves, technical reserves, product reserves and lack of experience, once encountered technical risk, simply unable to reverse, waiting for their only to retreat or be acquired. It is very important to pay attention to the technical risk of the gem because of the existence of technical risk, the average investor's long-term investment risk is larger than that of the motherboard company. Those who take the leading technology and technology as the backbone of the enterprise, must repeatedly invest a lot of cash in technology research and development. On the one hand, this input means risk, because you can't decide whether to succeed next time, on the other hand, such a company can not cash dividends for a long time, investors ' income can only come from the price rise.　　Once technology fails, cumulative gains over the years could be destroyed. Therefore, the Investment Enterprise Board of High-tech Enterprises, special emphasis on professional research and diversification of investment to avoid risk. (This article is provided by Berliner, author of SSE Securities Classroom series)