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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!
LRCX 147.68+3.1%11:47 AM EST
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To: Mark Oliver who wrote (5021)3/22/1998 4:16:00 PM
From: Zeev Hed  Read Replies (3) of 10921
 
Mark, companies such as American Motors, Anaconda, Penn Central and Western Union were all as big as the three chaebols you mentioned. They all disappeared with their investors investment. As a matter of fact some four lesser chaebols have gone down already last year. The problems with the trio you mentioned is that they have to sell their PROFITABLE jewels at discount just to generate enough cash for day to day operations. I am not saying that any of these three will go bankrupt, but I am certainly far from sure they will not. The transparency of their books is lacking, but from what is mentioned in various media their cash flow at this point in time does not cover their interest obligations, and unless a rapid turn around is achieved, a company like Samsung might have to decide whether it stays in the LCD business or in the Dram business, being unable to fund both businesses at this time.

For a small company to take on these banking risks (and particularly with the lack of financial transparency of the potential debtors) is bad business practice. They should get GE capital into the picture to structure sales/lease back deals on the equipment and make sure they get paid upfront.

Zeev
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