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Technology Stocks : WDC/Sandisk Corporation
WDC 162.37+2.9%11:38 AM EST
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To: Ausdauer who wrote (3403)6/30/1998 12:56:00 AM
From: James Choi  Read Replies (2) of 60323
 
I have been an unpaid cheer leaders of this stock for some time. I guess it would be fair to also announce my change of position. I feel the business condition has been in favor of SanDisk in many aspects. As we all saw from their own announcement, CF is selling more than all other standards combined. And of CF, SNDK is selling more than 65% of them. The manufacturing cost has gone down due to favorable currency conversion ratio.

If SNDK could not pull a record profit under these circumstances, I am afraid to think how it will do under more adverse conditions. With more competitions popping up, and some of them no doubt with technology that needs not pay SNDK, I feel SNDK failed to capitalize the critical moment.

So, I am not that optimistic about the future of this company anymore. There is a risk that CF might become a commodity item (like RAM and Hard Disk) and enter a bloody over-supply-based price-war in the near future.

SNDK will see a jump in price if it wins against Lexar. If it settles with some cross licensing agreement, I am not sure how much improvement in profit it will bring. And if it loses, then it may affect the stock price negatively.

Over all, my crystal ball has fogged and dimmed considerably. Thus, I am out of SNDK completely.

But then, it may be a good buy signal. Or a good bye signal. It's your decision and your money.

James Choi
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