Zeev, Jon and all,
Look, it doesn't matter. It's all details how much per share they lose. When valuing fundamentally unsound companies, you look at how close they are to the brink. Bankruptcy is not determined by earnings, it's determined by cash. Here, we see $150 cash, $100 debs, $50 Malay bank line (which will probably be called), and VERY NEGATIVE cash flow as far as the eye can see. Let's review the technology one last time: 1.3 TFI program, accelerated end-of-life forced by WDC; 1.7 TFI program, super accelerated end-of-life forced by WDC; 2.1 TFI program, canceled; 2.1 MR program, no presence, suppliers already locked for ALL major drive makers. Now which drive maker is going to risk its crucial head supply to a has-been which has underinvested, underdelivered, and is eons behind the technology curve? An honest assessment of the situation calls for immediate liquidation before more value is destroyed. No management in the history of the world has ever been honest in this respect. They ALWAYS have to drive the company into the Earth's core.
FWIW, I sure hope APM doesn't go to zero in 1998, as tax law changes have made that a taxable event. Much better (for me) for the stock to linger indefinitely on the pink sheets. |
