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Technology Stocks : Micron Only Forum

MU 237.16

+4.6%

Dec 5 9:30 AM EST

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To: DavidG who wrote (31295)	3/26/1998 10:19:00 AM
From: BSGrinder	Read Replies (3) of 53903

As a relatively recent bear, I believe you are overlooking a crucial factor in favor of the Asian fabs: the immense price advantages they have thanks to the devaluation of their currency. It is not even debatable that there is a huge glut in DRAM inventory and capacity. As long as there is a glut, prices will remain low. The glut will not dissipate quickly, as the Asians have a competitive price advantage and must sell chips to raise dollars. Micron loses money on every DRAM they make and will continue to do so for the foreseeable future (3 quarters). $1 bln does not look very big if you are losing $200 million a quarter, and nobody will lend you more. You can cheer for Micron and you can believe they have good management, but it is a simple fact that they are in a precarious position. Yet despite the drop from previous highs, MU stock is priced as if they are in great shape, with endless quarters of profit growth ahead of them. Clearly, everybody does NOT yet know, or at least fully understand, the nature and severity of Micron's problems. /Kit

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