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STJ Update My original thesis for this name was that there could be multiple expansion if one/two of the

below criteria was met 1. Bottoming in CRM market 2. Continued market share gains 3. Improving R&D productivity Improving R&D productivity will not be seen until 2013, but the perception that it can happen is what is key. That is still apparent, however, Q3 showed that the CRM market is still declining and STJ share gains are not apparent. STJ downgraded its assumptions for share gains and CRM market growth. Without either continued share gains or a bottom in the CRM market the stock cant work. I thought that a new product with higher ASPs and the replacement cycle would mitigate any account losses in the near term. This masking of volume share losses would allow investors to focus on the pipeline and lead to multiple expansion. It looks as though the volume share losses were higher than I thought and that is troubling. It is a partial thesis break. What was unexpected is the warning letter. While this wont expect current business, it suggests higher regulatory expenses and development headwinds. This limits the ability for the stock to work in the near term, however, it could be a good trade into Q4 depending on the price and where expectations are. I now believe the stock to be dead money until then.