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Technology Stocks : SanDisk Corporation
SNDK 175.53-0.5%Oct 28 9:30 AM EDT
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To: sndk_longterm who wrote (6)6/28/2010 7:21:43 PM
From: Sam  Read Replies (1) of 36
 
Seems plausible to me too, but I am keeping it on the back burner as far as investing strategy goes. If it happens--and especially if it goes through at anywhere near the price that Dan suggested a couple of months ago--it will be a pleasant albeit mixed surprise. Mixed because I do think that Sandisk is incredibly well positioned in a sector that is incredibly well positioned. On the other hand, new fabs are expensive and bringing 3D up to production status will be expensive, and it isn't clear to me that Sandisk can afford to do it on their own. Plus, although the next 5 years or so could well be spectacular if 3D is successful, it will be tough to get there without more financial muscle than Sandisk has right now.

And then there is the global macro economic situation--who the hell knows where this debt crisis will lead? If there really is another credit freeze next year or the following year and Sandisk has committed to spending several billion dollars on new equipment but the market freezes up like it did in '08-09--what then? A merger with Intel gives them more financial muscle, greater management depth, and (I presume) access to more R&D expertise as well as a much broader portfolio of products that will water down the boom times but will buffer the down cycles. This is still a cyclical sector, even though we are entering a period which should be a very long up cycle, IMHO, perhaps (emphasize that word) with a brief period next year when the market is transitioning to SSDs while the new fabs are churning out product.
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