WDC/Sandisk Corporation Message Board

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Technology Stocks : WDC/Sandisk Corporation

WDC 272.30

+8.8%

3:01 PM EST

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To: Art Bechhoefer who wrote (27093)	12/6/2004 1:32:26 PM
From: broozer	Read Replies (3) of 60323

Regarding a takeover............no one will be taking SNDK over anytime soon. They have a poison pill in place that will flood the market with additional shares as soon as someone acquires a certain percentage of the o/s shares. Eli is emotionally attached to this company and I don't see anyone prying this company away from him. It is his own personal piggybank. Art - regarding SNDK being valued at 6-10x sales, I respectfully disagree. More like 2-3x sales would be fair. SNDK is in a commodity business with massive additional capacity coming online (STMicro, Hynix, Micron), they have $1.25B committed in fab capital expenditures in the next 2 years, they are not generating FCF, there is excessive ESO dilution on the order of 10-15% per year, they are in a market with irrational pricing competition, and they have inventory issues. In summary, SNDK faces a difficult environment in the future. Disclosure....I am very long SNDK. Best, Broozer

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