I know all of you are POS fans so I am posting this here rather than the POS thread - Anybody read the Molecular Electronics article in the new Wired? It'll be available online July 11 and it got me thinking...So how many years out is Dan Niles willing to pay for POS's future "cashflows" if all the DRAM the world can hope to use can be self assembled into molecules in a flask, at the rate of year's supply worth in 3 hours, 10 years from now? I would think the mere possibility of that being the case would prevent a company like POS from trading at a premium multiple to historic market valuations, because even POS can't gain from the fabled $$trillions the Internet is going to generate for everyone involved if nobody uses their product anymore.
BTW, the article rightly points out that the new molecular development processes will not be following Moore's 1st or 2nd laws, so maybe Danny Boy has some special insight that they will progress slower once critical barriers are broken <g>
I'd like to ask Niles if he is planning on some pretty big dividends coming down the pipe, and soon, as reimbursement for the risk he is urging investors to undertake. I guess it only matters where DRAM prices will be later this year or next year...an average of $9 dividend every year for the next 10 years and investors get today's principal back if the company is still around, not accounting for inflation of course... Am I missing something here or is this the logic? Sounds like a great investment, where do I sign up for a margin account? Who the hell is buying up all that stock? Even with Maria's constant pimping it can't be a significant amount of retail folks, can it? Are institutions that stupid or is it me?
Some people are gonna take a big bath on this one day, and slowing PC growth is not the only thing to worry about. Obviously, POS will not be the only company affected by developments in nanotech, and a replacement product coming from this disruptive technology may not arrive for 15 or more years...or it may arrive in 5-10.
How can anyone long POS really think this a good risk/reward long-term scenario based on the current valuation, or does everyone think they know they won't be the last sucker holding the bag and are just riding the momentum up for now? (I guess that is the new investment style, anybody want to start a stock brokerage in China? There are what, 1.5 billion potential suckers there to sell American stocks to, though they don't have as much money, anybody know off hand how many clown bucks they could provide, maybe they could each buy a share of POS? What if the USD$ fell 30-40%, that would help wouldn't it? <VBG>)
I guess a bullish argument is INTC selling their POS shares may be motivated by the need to shore up their own earnings, who knows, though that could be a sign of a slowing PC market. It will be fun to see how this all plays out in the next year or two, though I hope it doesn't take that long.
Then again, POS could be a $500 stock at some point right up until the end. Maybe I should buy some Scambus to go with my POS tomorrow. I hope they take market orders. |
