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Technology Stocks : Micron Only Forum

MU 232.59

-2.1%

3:59 PM EST

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To: TREND1 who wrote (28815)	2/23/1998 4:11:00 PM
From: mike iles	Read Replies (1) of 53903

Larry, Can't believe there's no correlation between MU and DRAM pricing ... I don't mean day-to-day but say over the last 5 years. There sure is a correlation between pricing and MU's earnings. Since as you rightly say the stock is looking at future earnings maybe you have to lag one of the variables. I don't consider analysts' estimates to be fundamental analysis ... Skeeter's estimates, yes -g- .... Won't bore you with long description of FA (as I understand it) but in my opinion you can't get it out of a computer. The number one thing is management ... oddly enough I have a lot of respect for Appleton's manufacturing smarts. This is their strength. On the other hand, neither he nor the board have shown much ability to do strategic planning. Why is it going to $10? Because they are losing money ... a lot of money. My quick estimate is $70M in the semi business this quarter and, at current prices ($2.75?), more next quarter ... over $100M. Further out who can say. Depends on prices (at current prices they have to increase unit output by 67% compared to Q1 in order just to break even .. and that assumes costs stay flat ... sorry,david they won't) and how fast they can ramp production. With respect to the latter, their capital spending has been anemic for several quarters (no wonder Appleton's mad at the Koreans). You got to wonder if they can keep ramping at 20% sequentially. And there's 64 Mbit. Unlike DJ, I don't think it's a plus for MU that the Japanese are getting out of 16 and focussing on 64 ... how long before we see 16 meg at 80 cents (where 4 Mbit is now)?? When a company is losing a significant amount of money these sorts of questions raise their ugly head ... that's why I see $10. regards, Mike P.S. maybe someone can help me but I believe that 1X sales is actually a pretty high valuation for bottom of the cycle ... do I hear .5?

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