robert, i know that dram pricing does not always track mu nor does mu always track dram pricing. i argued this in aug - sept 97 when dram pricing was collapsing and mu was soaring. of course, the data was wrong, i was wrong, etc... until mu the stock collapsed right before eps were released in sept (advance notice is such a grrreat thing -ng-
mu's recent run to $80 was equally absurd. this run will be shown to be based upon greedy dreams when it shakes out.
i argue that mu's stock price is rising due to the absurd extrapolation of recent prices and not just the recent price increases themselves. mu will about break even this q. they will have spent about $2,000,000 a day on equipment for this privilege.
demand will soften after the bts and xmas box building. capacity will still increase. of course. pricing will decline. and mu's roi will continue to underperform.
so, mu spends $2,000,000 a day for the privelge of breaking even. they owe about $1,500,000,000 (billion). investing in mu is like buying us t-bills if the us didn't have monetary printing presses.
so, how is mu going to make $1.5 BILLION in actual money when they spend $1 billion a year on equipment?
they haven't yet... and they won't. in a couplt years they will be $2.5 billion in debt. best case scenario is for the "scenario" to work out. i don't think it will. i can absolutely see how forced conversion is very important to mu b/c it may be the only thing that significantly delays eventual bankruptcy.
so what's new? ;-) |
