>>MU is the low cost producer in it's segment, by about 20%! If they go out of business, it is only after a string of failures in that sector.<<
brian, cite your source. mu has said that on many occasions and the dillweed analysts keep repeating it as though it is fact.
i believe it is more mu management fiction along the lines of korea being nearly out of inventory last december. yes, they actually said that bs and it popped their stock about 14 points - all of which plus some has now been lost b/c they were wrong. :-)
mu has found that investors aren';t the brightest bulbs. neither are today's analysts. mr taurus said something to the effect of "monkeys hitting a buy button."
so mu gives people (monkeys?) reasons to hit the buy button - even if they don't exist. the low cost producer crap (with a 20% twist now) is just another example.
mu is hoarding inventory. it will be up another 50% this q. they have many, many, many, many TONS of inventory already. we know mu's gross cost is around the $3 range from their financials.
the koreans and japanese are selling dram BELOW mu's gross cost. and many do so with impunity b/c the dept of commerce ruled definitively THAT THEY AREN'T DUMPING - selling below gross cost.
so, if many korean and japanese companies can sell their dram at or above their gross cost, and this is well below mu's gross cost as revealed in their financials, then whose gross cost is less? you see, mu management thinks that their investors are retarded and can't do simple math and make simple inferences. they went to the barnum school of business management. unfortunately, they are correct. i sit here amazed daily what they say and what people believe. only in a manic bull market.
me smells a skunk. anybody that believes mu management for anything deserves what they get. big losses, more often than not. just like when they said "demand for dram continues to remain strong" with no mention of supply overwhelming said strong demand. popped the stock from $48 to $60for a few days - but, if you didn't trade out then you rode it all the way down to $22. thanks, barnum school of management graduates. most people need a 60% loss in a few months like they needed a hole in their head - but mu management was more than happy to push their loyal investors right over the 60% loss cliff ;-).
another point the mu gulli-bulls forget is that mu isn't diversified nor very big relative to the big boys in the industry. toshiba reported profits will be down this q, but there will still be profits. so, toshiba has positive cash flow even in this environment. looks like they'll be around for a while. i don't suspect that samsung and all the other well diversified competitors are going out of business anytime soon. why, dram will turn around in 6 months, right NOT!
however, mu's balance sheet looks horrible even after suckering $500 million from the dim bulbs. they will lose $200-300 mil from ops this q in addition to the cash lost from cap-exes. say $400 million net cash outflow. how long can they do that for before they suffer the dreadful LACK OF MOULAH deadly disease? remember to subtract out muei's assets off of mu's balance sheet so you know what mu REALLY has to work with.
they can, and will, sell assets off to stay alive. now that muei is so depressed and the pc market is tanking they won't get much. couldn't happen to a nicer bunch of guys, imho ;-)
whose gonna lend them money? they can't even pay back the interest on the $500 mil in debt they just issued.
i think they get zenithed eventually. or bought out at a few dollars a share. the6y are running on fumes and a prayer. and god doesn't like the kind of scum that napalms their investors with misleading statements over and over and over and over and over and over again.
btw, remember how microstamp was supposed to sell a billion this year? NOT! ;-) |
