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Technology Stocks : Micron Only Forum

MU 250.10

+10.8%

11:20 AM EST

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To: Skeeter Bug who wrote (16439)	7/10/1997 1:09:00 PM
From: Sridhar Srinivasan	of 53903

Skeeter, you (and most of the bears) seem to be missing the central points of the bullish thesis for mu's ascension: 1. They will continue cutting costs significantly (Don't ask me how much, cos no one knows.) 2. This glut is not going to be a perpetual phenomenon. The other problem with your argument is you insist on using last quarter's data (and some times with questionable accuracy) to support your argument. They had 49 percent gross margins (when the asp was 8.50) last quarter. It seems that ASP at the contract level this quarter is going to be around $7, even though spot prices have seen further erosion. If MU can make 16 Mb parts at $4, they still are sitting on a sizeable gross margin. Add the increased production (and corresponding profits) to this and you will understand why stock price keeps going up. Sridhar

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