Was taking a look at the Lexar 10-Q, not a comprehensive look by any means, and have a few thoughts and questions:
Lexar states clearly they think they have money through the end of 2001 and that's all. I'm still wondering who (other than a large competitor) might buy Lexar or its technology. I don't know why anyone would lend them money.
And here's what I'm still quite confused about - they list as a risk, and mention from the settlement with SanDisk, that they will pay royalties on any cards sold that use SanDisk technology after March 31. Fine, we've known this. But why on earth is there potential future 'risk' involved with this, and risk that is not quantifiable or very limited in nature?
Surely, if they have been in production with their own controller for a while (since Q1?) how many controllers (hence royalties) could they possibly still have in inventory as of August 14 that the amount requires a listing under business risks?
By now those old cards should have been long sold or written off, right? Could it be that there is a problem or cost issue with Lexar's controllers, or that they still have huge inventory issues? Even assuming they still have some cards left, surely they could say something to the effect of 'the most we expect these royalties to be is $xxx,xxx, given what remains in inventory and the fact that we have now migrated fully to our new controllers.'
Does Lexar, like SanDisk, not recognized direct-to-retail channel sales until the final consumer pays for them, and for this reason they can't say how much is getting stale on the shelf and might be returned (but surely inventory has been burned through many times over since the spring?)
Thoughts?
Andre |
