The problem is, I can't find any competition that would pose a serious threat either to CF or MMC. I can live with competing formats and products, such as SmartMedia and MemoryStick. If all of these products gained acceptance in the marketplace, there would still be room for all. I also can't get too excited over embedded flash memory chips of the sort Intel and AMD seem to be making, or embedded memory in cell phones in place of an MMC removable card. It's not a question of who sells what, but whether the SNDK products can be profitable and can experience several years of robust growth. I think that question has already been answered.
What gives me a problem is the comparison between the performance of SNDK shares and shares of other companies involved in flash memory, such as SSTI. One goes down, the other goes up. The one going down makes lots of money. The one going up doesn't. The situation is beginning to remind me of the summer and early fall of 1998, when SNDK just kept dropping. Deja vu all over again?
Granted that the sale of SNDK shares held by Seagate complicates the present situation and makes the stock weaker than it ought to be, at least until Seagate's holdings of SNDK have been absorbed in this relatively limited volume market for smaller companies. But that situation still doesn't explain the weakness in share price. Granted that higher interest rates have a dampening effect, but if so, it should be felt on other stocks of highly profitable companies, not just ones that are short of cash. If anyone has any ideas, they sure would be appreciated. Meanwhile, the only thing I can see is to take advantage of the weakness. |
