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Technology Stocks : Micron Only Forum
MU 341.28+2.4%2:07 PM EST
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To: TREND1 who wrote (33377)5/15/1998 4:23:00 AM
From: Skeeter Bug  Read Replies (2) of 53903
 
larry, there i go again. mu didn't lose $100 mil from ops last q. they lost $207.5 million. their loss this q from ops will be worse. maybe much worse.

so, let's say they spend $200 million on capex (they wanted to spend much more and may actually do so - this is very conservative) and lose another $200 million from ops - again, following my long, long history of being very, very conservative.

that is a $400 million dollar loss. per q.

now, mu's balance sheet says they have $1.8 billion in short term assets and $0.7 billion. that leaves $1.1 billion in short term cash to pay for these capexes and losses.

let's subtract $400 mill and we are now left with $700 million.

another q like this (assuming it isn't worse or this q isn't much worse than $400 mill - and it may be) and mu doesn't have enough short term assets to cover their losses and capexes for another q.

either the dram market turns ver much positive in the next 6-9 months or mu is out of cash.

then they have to sell assets to raise cash. no wonder they have been doing that over the last several qs. better piece by piece than all at once. their actions seem to indicate they knew this could happen and they have been preparing for it.

mu is in dire straights. $353 million is in receivables that they are on their knees praying they will receive. i'd be willing to bet mu is not aggressive in writing down accounts they probably will never receive.

so, larry, another year of this and mu's solvency has to be in doubt. 6 months of this and then people will have to begin to anticipate mu's solvency problems 6 months later.

at least that's what i think the wall street journal would say ;-)
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