Sam, I hope you are right in being optimistic, and I agree that if one needs cash, there will be no better opportunity than right now.
Since I have not heard anything from SNDK in response to several questions I asked them last week, I can only guess as to the real reasons for raising cash at this point. My first assumption is that they need money to build inventory of flash cards during the period that the Virginia plant is being dismantled and the equipment reinstalled in Japan.
My second guess is that they want to continue the Tower Semiconductor project to build a new plant in Israel, and some additional cash will be needed, if for no other reason than to pay for the stock they purchased at a price greater than current market value.
My third guess is that in order to implement the kiosks, if that project with PMI is still going forward, they need some money to build the kiosks, install them, and make sure they're working properly when unattended.
I am somewhat concerned about the ultimate viability of the kiosks in view of the lack of success of Kodak models designed to do some of the same things. The Kodak models are too difficult for most people to use on their own and require assistance. This is why the Kodak kiosks are installed mainly in camera stores or in one-hour labs located in drug stores, supermarkets, etc., where technicians are on hand during regular business hours.
Take a look at the new Canon printers designed to print 4x6 or panoramic formats with 4" width, using the dye sublimation process, printing directly from the flash card itself. If the paper and chemical costs of this process can be kept well below what one would pay at a one-hour lab, then the market for the kiosks is more limited than anticipated earlier.
The risk in investing in companies which purport to have proprietary technology is that their technology becomes obsolete too soon to recover their investment. This may have happened to SanDisk. I hope not, but I make these comments partly because I'd like to see a different spin from others. So far I've seen nothing from SNDK to help explain the latest events.
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