S3 (A LONGER TERM PERSPECTIVE) Message Board

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Technology Stocks : S3 (A LONGER TERM PERSPECTIVE)

SIII 0.0001000

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May 12 5:00 PM EST

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To: Bill Lin who wrote (7047)	10/30/1997 2:21:00 PM
From: Ken Muller	Read Replies (2) of 14577

Bill: You make some interesting points. However, I don't like some of your examples e.g. <<if you think this value approach is valid, buy GM, F, C: GM trades at 68 ('97 eps $7.80, dividend $2.00 3%, death value around $84-$95)>> How about some examples in the chip sector? Different market sectors have far different investor valuations. <<The fab is an ongoing part of their business and should be considered just as any other revenue/earnings you are mixing two issues: 1) addition of minority owned income/loss and 2)valuation of the USC investment at market value. If USC costs become uncompetitive, it will lose money. TSMC and UMC (USC parent) often bid for the same business. Overcapacity concerns are driving current Pac Rim tech sell off. The fab earnings are the key component here, IMO. The IPO will generate $$ based on earnings, not replacement cost. Your comment about overcapacity concerns also puzzles me. I haven't heard anything about 0.35 Cmos (or smaller) seeing projected overcapacity problems. Can you shed some light on what makes you say this? I agree with your other remarks. Ken

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