Here are my thoughts:
[Get ready for a long one ... do you know where your "next" button is?]
1) To say the least, I'm very happy, especially since I predicted .25 on this thread weeks ago (hey, it might be my only chance to brag!). I had a huge risky play sitting on this one, and it looks like I should make some good money in the coming weeks.
2) PREDICTED PRICE SUPPORT - Based on today's earnings report, an my wacky view of things, I feel we should see immediate support for a price of $54. Why? I just simply take the following formula -
.27 X 4(quarters) X 50 (ave tech PE) = $54
I'm just getting started. This formula doesn't really take in account the company's current growth rate which is a lot more than 50% (some people think a company's PE should equal its annual growth rate). You could argue that their current growth rate is 300%+.
This is my very near term prediction. We might actually see a spike up to 60.
3) PREDICTED PRICE SUPPORT - PART 2 What could drive it even higher? Consider that three (I think) companies signed licensing agreements with Sandisk IN THE MIDDLE OF AUGUST! This was the middle of the quarter for crying out loud. So I argue that we might see a slightly higher amount of dollars for royalties in Q4 for this alone.
Also, Sandisk has been in a quiet period leading up to their earnings announcement. I think they have been holding off on news lately, so I expect other news soon.
Sandisk will be discovered by more investors over the next 3-4 months. Also, I expect ANALysts to come out with strong buy ratings. Some investment houses have been staying away from Sandisk, but I think they will begin to come out of the woodwork. The fact that SNDK only has about 6 mil shares outstanding is a thorny issue in this regard. This is a great company for brokerages to push. The company, whether we like it or not, will be hyped up a bit.
Sandisk will sign additional cross-licensing agreements.
4) THOSE NASTY COMMENTS BY OUR BUDDY ELI HARARI
This company knows what they are doing with their investors. They have always been forthright, honest and extremely conservative. Just look back at all the CEO reports over the last two years. Don't let this bother you.
But if it bothers you, let's just look at it this way. Even if Sandisk revenues are flat in 4Q and royalties are exactly the same, then my formula above should be exactly correct! Let's have four quarters of .27! That'll work find. But if you think about it, you know it's not the case.
5) MY EARLIEST PREDICTION FOR 4Q
Just for fun, I'm now looking for .32 in 4Q. This is based on flat revenues and slightly increased royalties. But every signed contract and positive news release would move this number up. Price competition is a serious factor here, but I'm comfortable with Sandisk's apparent hold on marketshare. It's really impressive. You must soak in the fact that these Sandisk guys are extremely savvy with their patent portfolio and it will carry them a very long way.
6) BUY-OUT CANDIDATE?
Yes, but I'm trying not to think about it. I see this as a loss because I hope to play this one for as long as possible. But if thet're bought out, or whatever, it'll come at a very high price.
7) THURSDAY TRADING
Golly, like I can really predict the future? Well just for conversation sake, I think we'll see a whopping pop up on thursday, matbe to 48 or better, with an eventual move to 54. But the market is looking for a reason to sell off, especially in the tech sector. I can't see how we can possible get to the end of November without a 15% correction in the NASD (maybe it's started already). This stuff about Intel and the effect $999 computers are having on the market is scary. Profit margins are falling FAST.
8) THE EQUITY OFFERING
This will scare some people, but it won't have any effect until details come out. I just found out about this so I'm not sure what to make of it.
THE END - Well I'm glad the earnings are out. I was losing some sleep over this one. We should be very happy tonight! Intel's flash memory market is crashing and we're taking over. This once tiny company with a stash of valuable patents with technology licensed by all the big guys is doing very well tonight.
This is just my opinion of course. Ya never know, I might be a crazed lunatic in the basement of some science building somewhere. This is the internet! Whacko's everywhere (except those of us on this thread of course).
Continued good luck to all.
Congrat's.
dave
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