Jim, this is my opinion. The price of Sandisk was $10 earlier in '97 because: 1) there was less growth 2) there was a lot of uncertainty with Sandisk's position in the flash market. If you looked back at earlier articles about Sandisk (in EE Times for instance), you can see that all the digital camera manufacturers were still undecided about which flash standard to use. One company, Kodak, even went to the extreme by saying that they were not sure if flash memory is the solution for storage. Well all these digital cam manufacturers including Kodak and Casio have now signed up Sandisk. So Compact Flash becomes the de-facto standard for storage in dig cam.
Another uncertainty earlier this year was a lot of companies who are making flash including Samsung, Toshiba, are infringing on Sandisk's patent. Sandisk succeeded to ask the court to bar the import of Samsung's flash into this country. Samsung later settled and agreed to pay a royalty to Sandisk.
So to answer directly to your question, I think more mutual funds will now move into SNDK because there is much less risk. After all, the goal of the mutual funds is to return only around 20% per year to make the investors happy, so they don't need to take the risk. We, individual investors, usually take more risk because we want much more than 20% gain. I don't know for sure if mutual funds will move into SNDK this month or not because of the window dressing. But in the last few years, the January effect started to take place in November/December time frame, so the mutual funds may buy SNDK at the end of the year. |
