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Technology Stocks : Micron Only Forum

MU 241.14

-6.7%

Dec 12 9:30 AM EST

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To: Chih-Lun You who wrote (19917)	9/19/1997 10:58:00 PM
From: Skeeter Bug	of 53903

chih, how long have you been in the market? sequential declines in earnings are not good, dude. especially when the story was how great a situation the dram boys would be in. the story was wrong. declining eps are not expected this q. however, i had a very similar conversation with people when the stock was $56 or so - so your valuation model is quite a bit better than some bulls on this thread ;-) don't let them make less than $0.30. if so then the teens are a VERY REAL POSSIBILTY! :-) why? 1. declining eps (never good for a GRWTH stock with a GROWTH multiple). 2. $0.30 annualized is $1.20. combined with declining eps and a MASSIVE product transition it appears that $1.20 may not be possible. 3. depreciation expense will kick in in a big way. 4. interest expense will kick in in a big way. 5. the low cost producer claim will no longer be true - at least in the beginning. 6. uncertainty over mu's future will be called into question - how long can you have negative cash flow? 7. tk, the most important analyst, is growling like a bear (you better believe all his clients were selling when the suckers were buying!). 8. dram is already down nearly 20% from last q's disaster - is mu even making money at these levels? all this for the dirt cheap price of $37? I DON'T THINK SO... $15-25, maybe... and that is after the analyst downgrades. hasn't this glut lasted long enough? :-)

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