SNDK looks terrible on a chart reading standpoint, and I'm afraid the business end is getting downright ugly as well. The removable flash business is turning into a pure commodity venture with all of the cross-licensing agreements, not to mention that bankruptcies during this weak consumer market are a very real possiblity (i.e. Lexar, Viking, Simple, and other flash players could dump their inventory on the market in the case of bankrupcty)...
..not to mention the questionable license fees from MMC and SD... these fees may not have merit, be enforceable, or could evaporate -again- should bankruptcies happen.
The economy in general is getting ugly and I see and uglier future in the near-mid term..digital camera sales have slowed, mp3 player sales have hit a wall...cell phone sales have slowed...this does not bode well for companies and stocks like SNDK that trade on a compelling story but are realizing disappointing revenues and margins at the same time.
I got out of SNDK a couple of months ago butI still follow the story.. but the story is getting uglier and uglier IMO. (However, great for the consumer! flash prices have really come down in the last few months) I see SNDK in the teens in a few weeks.
*One bright point for Sandisk is if their joint venture w/ Toshiba comes online nest year, and Tiawan gets hit with another earthquake. Sandisk could benefit from that. Thankfully, the chances are remote for this in the next few years, and not worth investing on. |
