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Technology Stocks : Spansion Inc.

CY 23.82

0.0%

Apr 16 5:00 PM EST

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To: Pam who wrote (3053)	1/16/2008 8:09:39 PM
From: bobs10	Read Replies (1) of 4590

You: Bob, big boys do not get involved in stocks trading below 5 dollars. Some institutions have very specific restrictions. me: Well, big boys is somewhat of a relative term. At $3.00 per share $45m will buy you 15m shares if your judicious about how you buy. The world of big boys isn't limited to mutual funds. There are lots of hedge funds, individual investors and venture capitalists for who $45m just is'nt that much money. What SPSN has to do is make a good case for the money. you: SPSN will continue losing more because they have a heavy interest bill to pay every Q whether they make money or not. Higher R&D expense should eventually result in more new products that can increase revs but that takes time which Spansion doesn't have a whole lot of. me: Well, as I understand it most of the money was raised in JP at very favorable rates, but I need to take more of a look at that. Granted SPSN has debt and Depreciation will be a problem, but they got something for the cash they spent. What they got is the only 300mm/65nm fab producing MirrorBit products which includes NOR. Besides the cost advantages of smaller dimension die on larger platters they also have things like BIST that's supposed to reduce back end costs by 30%. Back end costs are rapidly becoming a major cost of all NVM. And that doesn't include the inherent MirrorBit production advantages that require some 40% fewer critical steps to manufacture than Strata Flash. you: Higher R&D expense should eventually result in more new products that can increase revs but that takes time which Spansion doesn't have a whole lot of. me: Here we agree. MirrorBit has its good and bad points. One of the bad points is that SPSN/SFUN essentially has to do all the developing alone. The good news is that if it works no one else has it. That's why I'm so interested in the products SPSN has had in the works for awhile now. From my perspective if the products in the pipeline work and can be manufactured with the cost advantages that have been talked about then SPSN is good to go. However, that's still a mouth full of ifs.

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