Hi mishedlo; Re: "I think the market does not think much of MU's case against RMBS."
You could also consider the theory that MU sells lots of SDRAM, and that every 1% reduction in the price of SDRAM corresponds to a considerably higher percentage reduction in MU's profits. And since investors buy and sell stocks based on the earnings trend, the resulting change in how they value MU could be considerable. Here's a reminder of how SDRAM prices have traded this month so far:
Prices of PC133 SDRAM:
09/01/00 1.210 ( quiet trading)
09/04/00 1.210
09/05/00 1.210
09/06/00 1.212
09/07/00 1.210
09/08/00 1.205 -.005 (down trend starts)
09/11/00 1.197 -.008
09/12/00 1.197 -.000
09/13/00 1.192 -.005
09/14/00 1.187 -.005
09/15/00 1.185 -.002
09/18/00 1.182 -.003
09/19/00 1.157 -.025 (ouch!)
09/20/00 1.151 -.006
09/21/00 1.134 -.017 (ouch!)
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You might also wish to consider the theory that MU's announcement that they are converting some debt into stock would mean that there would be more stock on the market soon, and that Zeev Hed has been calling for exactly this scenario, and for the resulting stock action, for about a year. Here's some recent references:
Jul 16, 2000:
I remember when Zeev floated the "scenario" and everyone scratched their head wondering how "they" would get it up to 80 something (now 40 something) and keep it there long enough to force conversion. #reply-14054674
Mar 13, 2000:
Greg, don't put me in the camp of the bears for the last six months, the whole idea of the "scenario" was a bullish stand, at least, I thought so. In another three weeks, we will probably have the forced conversion and one would expect many of these shares (those not yet hedged) to come out and look for new "strong" hands. I think that if that occurs during one of the market periodic malaises (which I believe may be more and more frequent), then a major move down could indeed be anticipated. #reply-13195177
-- Carl
P.S. You're basically a Rambus-head, and see everything that happens in the memory industry as somehow being a part of the wish fulfillment of Rambus investors. It's those blinders you guys wear. |
