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Technology Stocks : Micron Only Forum
MU 263.78+4.5%Dec 10 3:59 PM EST
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To: Kerry Phineas who wrote (30979)3/21/1998 9:08:00 PM
From: Ted The Technician   of 53903
 
Kerry,

I use book value to loosely identify the short-term floor (e.g.,
the floor might be 0.8-1.5 times book value over the next quarter.)
Your suggestion that "they couldn't sell a lot of the equipment
on the books at their stated level" tells me that
their "true book value" could be less than what I calculated.

What's the value of all of its non-semiconductor parts?
Difficult to answer, not of short-term importance because
I don't see MU getting out of DRAM right now,
and any answer today will be different than an answer
tomorrow because there are too many parameters that can
change on both the semiconductor and non-semiconductor side
of the house. By the way, semiconductor memory was $283M,
PC systems was $396.5M (*63%), and contract manufacturing
was $75.5M (*63%) in sales last quarter. One might say
only half of MU's business is semiconductor memories!

You asked "what is the risk of their going bankrupt?"
Low risk for the next two years (at $4 loss / year for two
years, it would leave a book value of $14-$8=$6/shr) - but
I won't be surprised to see the price drop.
I can't see much farther than two years (some people
might even argue that two years out is impossible given
the speed that this business changes).
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