Steve Appleton is right. Look, forget the stock price of MU, but what Appleton says about the Koreans is right. You've got a situation of a foreign govt. pointing to a part of the electonics sector, calling it "strategic", bankers nodding their heads and throwing money at it without any serious regard for return, idiotic ignorance of competitive strategy on the part of foreign managers...
And we've seen the results.
Sorry, but companies that screw-up deserve to fail without the safety net of a government/banking "winky, winky".
And the fact that the Asian players are crying over MU not squeezing the breeze on production when Hyundai, Samsung, and LG suspiciously all seem to time their production shutdowns at the same time (hey Commerce Dept. did you catch that one? Can anyone say "hmm...that looks like collusion" with the clear intent of driving up the cost of memory chips to American consumers?)...give me a break. It's called competition and although I'm still fuzzy on what the overall impact of MU's decision to fill in the supply did to overall prices, from a moral/ethical standpoint MU effectively saying FU to the Korean's shutdown should actually be applauded.
I mean, Dongebu coming out and saying they were entering DRAM? How nuts is that? What, their hurdle rate is negative 15%? Guys, the way I learned it you want a positive IRR.
If the IMF holds the cards, they should play as hardball as they can and take the proper precautions to insure real change. If the Koreans find it unpallatble, it's certainly their right to refuse, but it's certainly the IMF's right to insure that they're not throwing money down a rat hole.
Look, I know some of you aren't big fans of MU/Appleton, but give the guy credit for going on CNBC and being pretty darn forthright about what the actions of foreign players are doing to MU - obviously they are hurting it.
And speaking as a "manager" and not a "trader", I share his frustration. You've got a situation where a U.S. company and its management could have made every correct decision possible (for the sake of argument, let's assume they did) and the end result is that they end up getting crunched because most of the other players are totally clueless.
Good trading,
Tom |
