I think it ironic that you make a simplistic, inappropriate analogy:
"That is like saying my $200,000 mortagage puts me in serious financial trouble b/c I only have $200,000 in the bank and it is only a matter of time before the bank takes my $1,000,000 home."
while at the same time calling people "silly" for pointing out that, with a huge negative income for the foreseeable future, MU already has debt that is equal to their cash. It will be interesting to see if bankers think such an argument "silly."
Regarding book value, as pointed out earlier, assets that cannot be used to make a profit are not as valuable as their owners pretend. Micron's book value is largely an accounting fiction. Also, Micron's debt-to-equity ratio is 50% higher than the industry's, according to Media General Financial Services.
What does seem silly is the refusal of investors to seriously discount Micron's precarious position. Micron may indeed succeed despite this risky business environment, but their stock is priced as if success is a certainty.
/Kit |
