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Technology Stocks : WDC/Sandisk Corporation
WDC 160.04+5.2%Nov 5 3:59 PM EST
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To: Steve 667 who wrote (14118)8/22/2000 6:01:22 PM
From: Ausdauer  Read Replies (2) of 60323
 
What has me puzzled about this whole Lexar thing is that first of all they aren't stupid.

I guess I would contend that stupidity hasn't been completely ruled out as a possibility.

I will say point blank that I feel the company is in a difficult legal position right now.
No matter how much you one tries to argue otherwise,
SanDisk's pursuit of Lexar has been highly successful to date.
Lexar also has a $10 million dollar line of credit which could be affected directly by SanDisk's actions.
They are not profitable and they are not projecting profitability for another six quarters despite the rapid growth in demand for flash memory/flash film.
Also, they do not manufacture flash memory themselves and are dependent on companies like Toshiba, a SanDisk partner.

As an investor, knowing what I know about Lexar's competitive position in the digital film market, I would say that the fact that the IPO went forward was a bit surprising. Granted the offering was repriced and scaled down in scope, one still cannot interpret an investment in Lexar as anything but speculative.

What I do know Lexar is faced with a difficult burden of proof in the upcoming court case (now only 2 months away) and also faced with a difficult redesign. I am not sure how far $50 million dollars will get them.

Ausdauer
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