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Technology Stocks : WDC/Sandisk Corporation

WDC 168.47

-3.5%

12:26 PM EST

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To: Jim Cash who wrote (3348)	6/20/1998 10:55:00 AM
From: limtex	Read Replies (4) of 60323

Jim - Is there any possibility do you think that although everything in the announcement warning issued by Eli is actually true today but that something is about to happen that hasn't hapened yet but someone in the company has an knowledge about it but as I say there is nothing hard and fast today but there might be in a couple of weeks or so. For instance suppose the Lexar suit was in the heat of legal pre-trial battle and SNDK needed to let the court know how badly was the efffect that Lexar's alleged copyright infringement waas having on the whole of SNDK and putting SNDK's very existence into question. So SNDK goes off and issues Thursdays warning and this really puts the frighteners on Lexar and their legal team. In the meanwhile the variuos parties here who actually know eachother realise themselves and know themselves that they are going to settle. So SNDK management puts out the warning on the face of it with all the know facts today, down goes the stock, in go the inside buyers, and in a few weeks up comes a settlement nad then up goes the dtock and then comes Q3 after a decent interval and then comes an anouncement that competittion is paying royalties and therefore competitive pricing has abated somewhat and therefore good Q and good Q4 and guess what the MMC for which they preusmably have a "low backlog" today suddenly has sprung loads of orders. /and then up goes the stock bigtime. Now is all this hypothesesis possible. If so it would make the stock very desirable. See amongst all the other questions over the action duribng the week I can't help wondering why with all the advantages that SNDK had as the market leader with 60% of the CF market and all those wonderful contracts and royalites on Smart Media so that even if SNDK failed to get revenues from sales they could at least get some increased royalty income which isn't bad......Kodak deals and all the announcements ....Nokia...MMC ......a whole new "foundry" in Taiwan with a great joint venture partner ........ and then comes little Lexar and Viking and a coupe of others and get on merrily in business with no fuss and just take all the growth and leave us with no hope. These guys took the business away from our guys like taking candy from a baby. Look at the problems of component supply that Eli highlights in the 10Q you have to guess the exact number of wafers and if you don't get it right it lands up with a huge write off or some competitor gets your business.....controller chips come only from MOT etc Lexar, Viking and others don't seem to have any problem getting their goods into the store. How do we know...because you just have to go to the stoores and look or phone them. Does Lexar have its very own retail distribution business in Japan? does Viking do they want or need such a thing? New design ins are really great news but what about all those design ins over the last two years? where are all the orders from those design ins and the growth that they must have induced. Can't all be waiting for Christmas surely. And the MMC? couldn't Eli have said one postive thing about the MMC or is it dead from a commerical point of view as well. And waht about that military tie up a few months ago ..... nothing from that not a bean not one order. This whole thing looks odd to me. and the more I think about it the odder it seems. Just some questions that have come to mind in the few hours since the bombshell. Regards, L

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