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Technology Stocks : Micron Only Forum
MU 237.16+4.6%Dec 5 9:30 AM EST
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To: Skeeter Bug who wrote (52763)7/6/2001 10:40:26 PM
From: ild   of 53903
 
From Fred Hickey's newsletter:
Speaking of DRAM disasters, Micron did report its biggest loss in history, as I expected. The problem was that non one cared. We'll get another chance for investors to care when Micron reports an even bigger loss next quarter. Spot DRAM prices are currently down another 50% from last quarter's average selling price. That means that revenue could come in at $600 million or less for the August quarter, versus $2.3 billion a year ago. Micron lost nearly $300 million pretax, before a $260 million inventory write-down last quarter on $800 million of sales. Assuming DRAM prices hold at these levels (and given the state of the PC market noted above, and the level of DRAM inventories worldwide, prices can't seem to list), Micron could almost lose as much money (half a billion dollars, before write-offs) as it has in sales this quarter. Micron cannot maintain its outrageous $24 billion market valuation given these circumstances. A target price of 10 (down 75%) would be more realistic. Micron's dire financials have forced them to slash capex spending about 44% next year. Every major semiconductor company in the world is cutting estimates. There's no way the Applied Materials, Novellus and KLA earnings estimates can hold on.
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