Jerome,
The trading pattern in the last few days was definitely abnormal.
Unfortunately for me, I sold only my trading shares yesterday morning and got stuck with the major position @20.
I can't say that SNDK is dead. This quarter wasn't expected to be good. I could live with the notion of falling ASPs (these could be partially overcome by transition to larger cards); also they'd, in all fairness, mentioned before that licensing revenues will be somewhat below 1Q. So one quarter results do not matter this much.
The trend, however, matters a lot. What we have failed to realize is that the demand for flash card is much lower than expected with (according to SNDK current statements) prospects still cloudy. This is where I personally had made a mistake, largely based on May statements to ML analysts - "the beginning of the quarter was bad, but the demand had firmed considerably", "at least $40M in revenues" (which is BTW 25% more than previous Q results).
So to me the real bad news here is that they still do not see any material improvement in industry-wide demand. This is what is going to hurt us badly today.
Ironically, some analysts may wait a bit and then start pushing the stock predicting a turnaround for Christmas. However, if SNDK misled the analysts (especially ML), this stock will be punished severely and will langusish even if/when the results improve.
Not a good day for us longs...
Regards,
Y. |
