Michael, The logic was not that convoluted this month. The main idea was the BTB was up from 0.85 to 0.90 so this was as interpreted as the semiconductor industry having hit a bottom. It was only on more subtle analysis that it became apparent that it was not improved margins or revenues that was driving the BTB back up but just closer alignment of bookings to billings. The BTB can't stay one way forever after all. What was weird was that Motorola came out the same day and announced that it was going to have "significantly" worse than expected earnings due to continued pressure in the semiconductor business. Motorola explicitly said that earnings would be *25%* below expectations *or MORE*. This was on expectations that had been continuously revised downwards, of course, as well. Motorola started way down at 9:30 AM when the market opened, but eventually (quickly, too) got to the point where it was only 2 points or so down. Of course, it has reclaimed almost all the lost ground since then, which makes no sense.
I think the big dilemma is how big of an earnings disappointment MU comes up with. If they can keep it from being too big, they will have a chance to hang on and wait for earnings to pick up when DRAM stabilizes, as many think it will/has. It is like -0.10 or worse, then who knows where it will go? I would think it should return to 16 again. It has been revised downwards again, so now the consensus forecast is -0.04 from -0.03, but of course, this has not stopped it from climbing into the mid 20s. What is your guess for the earnings?
There's a summary of the week from a fellow bear, Michael. What do you think about puts on Texas Instruments? That stock has not been sliding but they are exposed heavily to the same DRAM pressures.
Matt |
