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DavidG, as one who's been bearish for a while, I'll enter this debate and hopefully not introduce any new flaming. You bring up a couple of good points re "Bullish info was there when DRAM prices were climbing to $10, when Appleton...etc, etc." However, my contention during that time period was that in an industry where costs of production increase exponentially/MU tended to amortize capital expenditures over c. 5 yrs/they had lower capital expenditures in 96/etc, the only way MU should have been priced above $20 (much less $30)would be if they had huge profits and seemed in a likely position to be able to keep them. Huge profits because their accounting was/is Pollyannaish, b/c they keep assets on the book longer than is proper, and because they have distinct needs to grow to be able to meet the skyrocketing costs of building fabs. The reasons you've mentioned are all examples of temporary fixes to long-term problems that MU faces: for ex. 16 meg prices went up, at least in part, because of the anti-dumping suit and because of transitions to 64 megs- the big question when DRAM was going up was just how long they'd stay up when these fixes were no longer present. Did MU increase their cash position significantly? Yes, but probably not enough(depends on what happens- if they could reduce their tax liability for next April it would look MUCH better). Did MU face the huge challenges facing them re 64 meg and SDRAM? Seems that way, if you can believe the press(I don't, but then I'm a bear right now). Also, you were short when it was up there, right? What I would like to hear is a good analysis of MU's abilities to meet their Promethean cash needs over the next 2-3 years, not the next few months. Heck, they might be able to do it(help from Uncle Sam, they make enough money to survive and possibly grow, they merge with someone with some significant cash/size, etc.). Would be interested in your or anybody's inputs on this subject. Good luck. |
