David, So, if MU is the low cost producer, why do they have to borrow money at 7% plus an equity stake (admittedly worthless) while the Japanese can borrow at 2 1/2% with no equity stake? Sorry, it just doesn't compute. And borrowing costs will eat MU's lunch during this time of turning a loss on every chip they make. And do you really think folks in Boise make less money than they make in Korea and Taiwan?
DRAM is not a horse race. It is a glue factory corral. I am not betting on any of these dead animals. Except to continue to decline, of course.
Since the overpriced pcs and servers are not selling anywhere but at Dell, and Dell doesn't have much market share, I still think MU is in 16 Mbit big time. At least, I haven't heard them brag about crossover, which they would do if they were at 30% or more 64 Mbit. <G> And, of course, they are nowhere in 128 Mbit or 256 Mbit or in embedded DRAM or in .18 mu lines or, pretty much anything. They are behind the curve, doing a proctology exam on all the lead horses in this game. As always.
Forever bulls on MU think that 8 out of every 10 years is a "temporary problem." <G> It's not. This co. is permanently dead meat, though they can get lucky for a couple of years every once in a while. At least on reported eps. They never have any real cash flow, which is why they hit the debt market as soon the day after the temporary good news is over. At $32, the stock price already indicates that this is the lucky year or two for them. I think the buyers are out of season, as usual.
BTW, what besides the price of DRAM, and the collapse of MUEI, matter for this co.? All of the other inefficiencies, high money cost, high labor costs, old technology, Keystone Kops management, bad technology guesses, etc., are just icing on the cake for a commodity co. in a dying commodity. And the price, man, the price. This co. is worth $32 a share on what planet?
good luck,
MB |
