Steve,
I think there is much more going on here than analysts and institutional share holders trying to "fairly value" this company.
There is almost always more "going on" in the price of a stock than people applying theoretical constructs which allegedly "fairly value" a company, especially when the company is the kind of business that Sandisk is in, high growth with multiple new markets opening up year by year but a product that is susceptible to being commoditized and yet has various aspects that are defended by patents. And there are at least some barriers to entry aside from the patent protections--for one, the high cost of fabs, and wrinkles in the manufacturing process that are patent protected and that increase yields, therefore lowering cost to those that have those protected processes. How to value a company in this environment will always be controversial. Sometimes the commodity view will prevail, sometimes the patent protection view will prevail. Sometimes the growth will be especially explosive, sometimes there will be a lull. My opinion is that for the next couple of years at least the growth will be explosive and the prize will go both to those with the patents and those nimble enough to get the best yields. Marketing will play some role, but I don't think really that much, barring an elaborate and expensive "Intel inside" type of campaign which may or may not be effective. Getting shelf space will be more important, as well as sales to OEMs, IMHO, to allow for economies of scale.
All IMHO obviously. |
