Skeeter, why dump Italy? That will leave Europe open to the competition. With an Italian facility and an Asian (Japanese partners), MU is much better positioned in the global DRAM business than ever before. It is not enough to make them, you got to sell them and have the local boys talk to the local boys is how contract pricing is arrived at, IMHO.
Why are you blind to the fact that this move is a masterpiece of strategic and financial planning? When DA BOYS make a good move take your hat off in admiration.
You sit yourself at the table there. The first question comes up, in five years will the world need DRAMS? The answer comes YES.
The next question is Will MU be a supplier of DRAM (and if not DRAM, what?), the answer is a resounding YES (they have no choice).
The next question is, how do we assure ourselves that we will be around to supply those DRAMS. And the answer comes with a number of tactical moves:
a. Keep reducing those bloody costs.
b. Keep selling at a fixed (contract) price as much as you can.
c. Increase our international presence
d. Find a way to be ready with 50% more capacity in the case one or more of our fellows poker player fold down.
e. Do d without any additional immediate cash requirement (we are tapped out on our credit card).
And I can see one of DA BOYS getting up and say, I have got an offer they and we cannot refuse. The TI deal is born.
They get to increase capacity by 50%. It cost them stock and some debt (most of which convertible to stock at $61/share). They eliminate one competitor. They get international presence.
Skeeter, in your zeal to be negative on this company you are missing the long range strategic implication of this deal.
Just take your hat off to DA BOYS and keep you puts, they may still pay by October, but that fact (the fact that the stock might still dip into the high teens) has nothing to do with the quality of this strategic move, nothing short of a master piece, and I would have been proud myself to have pulled it.
Zeev |
