Kerry, I say the odds favor their survival as they survived the last three DRAM downcycles. Of course, a point I have often made is that they had conservative management during those previous downcycles who prepared the co. for trouble. Those folks have all been canned. And they also had Lowery, who could make a silk purse out of the sow's ears this co. produces. He's been canned, too. This current group are gunslingers and perhaps as smart, but not as wise. Another reason the odds favor survival is that Simplot will probably sucker in with a cash infusion before he lets them die. It is nice to have a sugar daddy.
About half of the cash should disappear by this next report and I expect it all to be gone by the September report. Of course, they will try to hide the problem by holding warehouses of inventory, as they usually do during bad times. But that is just an accounting trick. This prediction assumes they don't sell more securities and that the banks aren't idiots. The first, I would hope, is impossible because investors have to be smarter than that after the last convertible scam. With banks, assuming rational behavior is always a longshot. <G>
But adding to interest expense only means they burn more cash with their high net expenses. Basically, this co. needs cash flow or it is a goner. They simply are not going to get it from operations. Layoffs, shutdowns, etc. will reduce the bleeding, but they only have so many pints.
BTW, there is nothing they can survive as other than a DRAM co. Diversification efforts have all been disasters, costing more than they were worth. They no longer have the moolah to try something else. Of course, given their success at touting worthless stock, they may make a stab at the brokerage business. <G>
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