The question is whether this puny $450 MM is enough for MU to do what it needs to do to say in the game, spend about $1.2-$1.6 B on a 300 mm facility (maybe less if they use the shell at Lehi). It i not impossible that by 2008 they will not be in the game (not likely but not impossible), so that long term call is still questionable.
On the other hand, if you think like a criminal (which MU does), it also is not impossible that they will engineer a rally to $80 when they need the money, so as to force these calls in the money in time. Prior experience (the scenario, for those in this thread more than a year) with MU, and the time table required for funding that 300 mm fab dictate that MU bring the money in, that therefore, dictates that I now call for an MU price in excess of $80/share, or a 25% above the "put" option MU may keep for himself (I have not seen the detail, but would not be surprised if the details of these warrants include a clause whereby MU can force warrants conversion if the stock is above a premium to $73 like 20% for 30 consecutive days).
You read this supper bullish comment on MU here first. Before that, I still expect MU to go further down, and maintain my target for the low of this cycle at $19, thus a four bagger potential from that low may now exist.
Zeev |
