David, I don't get it.
They're buying capacity on the cheap. Fine. Long-term they may need it. Short-term, they're buying the rights to mothball Richardson, (which one could call Lehi II) and they're buying the rights to an outdated wafer fab that if memory serves me correct is still using 6-inch wafers. The best parts of the deal are the JV's, in that they provide even more room for accounting obfuscation and the Singpore facility.
I think it's great Appleton wants to "leverage" Micron's technology. If its costs less to re-fit existing TI facilities than do something with their white elephant - fine. However, they will have to pay for the luxury, which ties up their assets that could be used to grow other parts of the business. And I'm not speaking of wacky strategic shifts - just stuff they've already ennunciated but IMHO never executed on with any significance - flash, RFC, embedded-DRAM.
I can only wonder what the local govt. officials out there in Lehi are thinking after the work they've done on infrastructure. Talk about a slap in the face. If I'm one of them, I get on the phone and say "pal, after jerking us around this long, you better damn well be thinking about selling that thing to someone."
TI got a steal.
Who knows what the thing will do tomorrow. Still think it'll close against the after-hours trading (in either direction), but there's some pretty heavy open interest in the Jun puts.
Will definitely be typical MU post-earnings wackiness <g>
Good trading,
Tom |
