Luc, the secret drink is the same nectar I was drinking in mid 1999, when exactly the same arguments you are presenting where brought up. If memory serves, Skeet even had one post in which he stated "MU at $85 (presplit of course), never!" (the equivalent of "when pigs fly"). Here are few things that might serve as a catalyst (and I am not saying now, but within to years, I have no idea on the exact time table as yet, since their might be some important stipulations in the warrants agreement that could extend or shorten that time period): Hyundai and few Taiwanese second tier could withdraw from the DRAM business, causing a major price spike. An earthquake could hit Taiwan at the "right time" (September 1999?), now that NEC and Hitachi created Elpida, they may decide to use this as an exit strategy. , XP might be a success (Na..., but it will be "painted that way). Once they get this train moving, you'll see analyst falling all over themselves to raise earning estimates to $5/share and put on this a PE of 25...
Don't misunderstand me, I am not saying that $80 is a fair price for MU ($120 presplit last year was neither and it got pretty close to $200, thus my wild optimism then was quite pessimistic in view of historical facts). All I am saying is that MU and its backers on the street are masters at manipulating the stock price, and you will ignore this fact at your own risk. Mu is pui generis in the semi sector.
Zeev |
